Lincoln Financial Securities Corporation Asset Management ... - Form ADV Part 2A.pdf · This annual updating amendment to the brochure (this “Brochure”) for the asset management

Lincoln Financial Securities Corporation

Asset Management Programs, Retirement Plan Services

and Other Advisory Services

Form ADV, Part 2A

March 27, 2020

Lincoln Financial Securities Corporation

1300 South Clinton St., Suite 150

Fort Wayne, IN 46802

(800) 258-3648

www.lfsecurities.com

This brochure provides information about the qualifications and business practices of Lincoln Financial Securities

Corporation. If you have any questions about the contents of this brochure, please contact us at (800) 258-3648 or

by sending us an email at [email protected] The information in this brochure has not been

approved or verified by the United States Securities and Exchange Commission (the “SEC”) or by any state

securities authority. Registration as an investment adviser does not imply a certain level of skill or training.

Additional information about Lincoln Financial Securities Corporation also is available on the SEC’s website

at www.adviserinfo.sec.gov.

Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates.

LFN11324

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Item 2: Material Changes

This annual updating amendment to the brochure (this “Brochure”) for the asset management programs, retirement plan

services, and other advisory services offered by Lincoln Financial Securities Corporation (“LFS”) is dated March 27, 2020

and the last updating amendment to this Brochure was dated January 3, 2020. There have been no material changes to this

Brochure since the last annual updating amendment dated March 29, 2019.

Clients are encouraged to read this Brochure in detail and contact their IAR (as defined below) with any questions. If

you would like another copy of this Brochure or a copy of any other LFS brochure, please feel free to access and

download it from our website at http://www.lfsecurities.com under My accounts—Disclosures or at

www.lfg.com/public/individual/adv, or from the SEC's website at www.adviserinfo.sec.gov.You also may request a copy

of this Brochure or any other LFS brochure by contacting LFS at (800) 258-3648 or [email protected].

Item 3: Table of Contents

Item 2: Material Changes ......................................................................................................................... 2

Item 4: Advisory Business ....................................................................................................................... 4

Third-Party Investment Advisory Programs .................................................................................. 6

Solicitor Programs .......................................................................................................................... 7

Co-Advisory Programs .................................................................................................................. 7

Financial Planning Services ......................................................................................................... 12

Other Types of Planning Services ................................................................................................ 13

Retirement Plan Consulting Program ........................................................................................... 14

Item 5: Fees and Compensation .............................................................................................................. 21

Client Advisory Fees .................................................................................................................... 21

Other Client Fees and Expenses ................................................................................................... 26

Compensation for the Sale of Securities ...................................................................................... 30

IAR Compensation ....................................................................................................................... 31

Item 6: Performance-Based Fees and Side-By-Side Management ......................................................... 33

Item 7: Types of Clients ......................................................................................................................... 33

Item 8: Methods of Analysis, Investment Strategies and Risk of Loss ................................................... 33

Asset Management Programs ....................................................................................................... 33

Financial Planning Services ......................................................................................................... 34

Additional Risk Factors ............................................................................................................... 35

Item 9: Disciplinary Information ........................................................................................................... 35

Item 10: Other Financial Industry Activities and Affiliations ............................................................... 36

Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading ............ 37

Item 12: Brokerage Practices ................................................................................................................. 38

Step-Out Trading.......................................................................................................................... 38

Best Execution ............................................................................................................................. 39

Item 13: Review of Accounts ................................................................................................................ 40

Item 14: Client Referrals and Other Compensation ............................................................................... 40

Solicitor Relationships ................................................................................................................. 40

Other Compensation .................................................................................................................... 40

Item 15: Custody .................................................................................................................................... 41

Item 16: Investment Discretion .............................................................................................................. 41

Item 17: Voting Client Securities ............................................................................................................ 41

Item 18: Financial Information ............................................................................................................... 41

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Item 4: Advisory Business

LFS was incorporated in 1969 and has been registered with the SEC as an investment adviser since 1985. LFS is

wholly owned by Lincoln National Corporation (“LNC”), a publicly held entity. Lincoln Financial Group is the

marketing name for LNC and its affiliates.

As of December 31, 2019, LFS managed approximately $2.7 billion of client assets on a non-discretionary basis and

approximately $667 million of client assets on a discretionary basis.

LFS offers a wide variety of investment advisory programs and services. Investment adviser representatives of LFS

(collectively, “IARs”) assist clients in pursuing their financial goals by providing personalized financial planning services

and investment solutions. The investment advisory programs and services described in this Brochure may also be offered

by certain independently registered investment advisers, who are also registered representatives of LFS in its capacity as

a registered broker-dealer (each, an “RIA”). References in this Brochure to the products and services offered by the

IARs incl u d e the RIAs.

This Brochure provides an overview of certain investment advisory programs sponsored by third parties that are offered

through LFS, as well as LFS’ financial planning services, retirement plan consulting program and certain other services.

Any information relating to the tax considerations affecting your financial arrangements or transactions is not intended to

be tax advice and should not be relied upon as such. Neither LFS nor the IARs provide tax, legal or accounting advice.

In addition to the advisory programs and services described in this Brochure, LFS also offers the following advisory

programs and services, which are described in separate Forms ADV, Part 2A:

• Custom Wealth Advantage Choice Wealth Management Program; and

• Custom Wealth Advantage Program (which includes the Custom Wealth Advantage Separately Managed Accounts

Program, the Custom Wealth Advantage Mutual Fund Program, and the Custom Wealth Advantage Strategist

Program).

For a detailed discussion of each of the advisory programs and services listed above, including the fees and compensation

associated with them, you should refer to the Form ADV, Part 2A for the particular program, which is available on our

website at www.lfsecurities.com under My accounts—Disclosures or at www.lfg.com/public/individual/adv, and on the

SEC’s website at www.adviserinfo.sec.gov. These Forms ADV, Part 2A may also be requested by contacting LFS at

(800) 258-3648 or by sending us an email at [email protected].

When you choose to purchase products and services through LFS and work with an LFS financial professional,

you have the option of investing through a transaction-based account, such as a brokerage account, a fee-

based investment advisory program, or both. It is important to understand the services you can expect to

receive and the costs associated with each of these different types of accounts and relationships with LFS and

your LFS financial professional as further described below.

Transaction-based account, such as a brokerage account With this type of account, you pay commissions and other charges (such as sales loads on mutual funds) at the time of each

transaction, such as the purchase of a mutual fund, stock or other investment product. These commissions are the primary

source of compensation for the transaction-based advice provided by your LFS financial professional when making such

recommendations. When acting as your broker, your LFS financial professional can make recommendations and provide

guidance to you in selecting investment products and services. Your LFS financial professional may also provide

investment education and research; these services are incidental to the brokerage services LFS provides. This type of

account may be more appropriate than a fee-based investment advisory account if you do not want ongoing investment

advice on assets held in the account, or ongoing management of your account, and instead want only periodic or on-demand

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advice and recommendations specific to the purchase and sale of investment products. This type of account may result in

lower costs for you if you expect to trade on an infrequent or occasional basis. Fee-based investment advisory program

A fee-based investment advisory program, sometimes called a “managed account,” may be more appropriate than a

transaction-based account, such as a brokerage account, if you want ongoing investment advice and management of your

account. This type of account may result in lower trading costs for you, particularly if the program you select does not

assess transaction costs separately. LFS acts as a sponsor and introducing broker-dealer in connection with some of the

investment advisory programs and services it offers and LFS offers a number of different investment advisory programs

and managed accounts.

With this type of account, you will usually pay an ongoing investment advisory fee based on the value of the assets held in

your account in exchange for ongoing investment advice and management of your account. The asset-based fee is the

primary source of compensation for the ongoing investment advice provided by your IAR. You generally will not be

charged commissions for each purchase or sale of an investment product, although you may be charged a transaction charge

for executing certain transactions and trades within the account, and you may incur other fees and costs associated with

your account.

Transaction charges will not be used to compensate your IAR for his or her services in this type of account. Fees for

certain investment advisory programs may be charged as an “all-inclusive” bundled fee based on the value of the assets

in your account. This bundled fee usually includes a portfolio management fee, brokerage and transaction costs, and

investment advice and is sometimes referred to as a “wrap fee.” However, this bundled fee usually will not include costs

associated with transactions that are executed at broker-dealers other than the one at which your account is held.

Transactions executed at broker-dealers other than the one at which your account is held are sometimes called “step-out”

trades and are described further in Items 5 and 12 below. Fees vary depending on which LFS programs and services you

use. Fees may be billed in arrears or in advance, depending on the program and the terms of your client agreement. Fees

typically are charged monthly or quarterly based on the assets held within your account for services such as ongoing

investment advice, investment selection and recommendations, asset allocation, execution of transactions (depending on

the program you are in), custody of securities and account reporting services.

Alternative investments (“AIs”) may be held in a managed account, but generally for consolidated reporting purposes only.

AIs are non-traditional investments such as non-traded real estate investment trusts, limited partnerships, oil and gas

programs, managed futures funds, and hedge funds. Generally, AIs are illiquid and not traded on an exchange, but may

offer clients opportunities for diversification in their investment portfolios. AIs are usually purchased directly from the

sponsor company on a commission basis in a transaction-based account. However, a client may request that an AI be held

in a managed account. When an AI that was sold by an LFS financial professional who earned a commission on the sale is

held within a Custom Wealth Advantage Choice Wealth Management Program account or a Custom Wealth Advantage

Program account, it will be coded as an unsupervised asset, which means that LFS will not provide investment advisory

services or oversight on the AI and the AI will be excluded from the advisory fee calculation but reflected as an asset on the

performance report. Unsupervised assets are not included in the performance calculation for Custom Wealth Advantage

Choice Wealth Management Program accounts or Custom Wealth Advantage Program accounts. Notwithstanding the

foregoing, LFS may from time to time permit certain AIs that are not sold for a commission to be held in managed accounts

as supervised assets. The AIs permitted to be held as supervised assets by LFS will generally be in a share class designed or

intended to be used in connection with a fee-based account. In such cases, LFS will provide investment advisory services

and oversight of the AIs as it would with other assets maintained in the managed account and the supervised AI will be

included in the calculation of the account’s advisory fee and performance. If these circumstances are applicable to your

account, the offering documents for the AI, your client services agreement and/or other account documentation will provide

additional information. Additionally, in some TAMP (as defined below) programs, the investment manager(s) selected may

use AIs in the management of the account and may include the AI asset(s) in the fee calculation and in the performance

calculation.

Please see the applicable client agreement for additional information. LFS’ advisory fees generally are negotiable. Some

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programs charge separately for asset management services, ongoing investment advice, and transactions. In such programs,

you may be charged brokerage costs for transactions in your account in addition to the advisory fees. Fees and other charges

are described in more detail in the applicable program’s client agreement and Form ADV, Part 2A.

More information about each of LFS’ investment advisory programs and services is contained in the applicable LFS

Form ADV, Part 2A and is available through our website at www.lfsecurities.com under My accounts—Disclosures or at

www.lfg.com/public/individual/adv, and through the SEC’s website at www.adviserinfo.sec.gov. These Forms ADV, Part

2A may also be requested by contacting LFS at (800) 258-3648 or by sending us an email at

[email protected].

Third-Party Investment Advisory Programs

LFS offers access to several investment advisory and asset allocation programs sponsored by third-party asset

management firms or sometimes otherwise referred to in the industry as turn-key asset management programs

(“TAMPs”). TAMP programs allow clients to choose from a variety of professional investment managers. TAMPs

offer clients different model portfolios associated with different levels of risk. LFS does not provide asset management

functions for client accounts held in TAMP programs, as the assets are managed by the TAMP sponsor and/or one or

more investment managers made available through the TAMP program. Client accounts in TAMP programs may be

invested in a number of different investment products, including, but not limited to, stocks, bonds, mutual funds,

annuity contracts, and exchange-traded funds (“ETFs”). LFS is not responsible for any securities or other assets

purchased or sold or chosen as investments in client accounts that are invested through TAMP programs, including,

but not limited to, any illiquid investments, AI assets, specific mutual funds or share classes selected. The specific

services offered by TAMPs, and the fees associated with those services, can be found in the applicable disclosure

brochure of the TAMP sponsor firms noted below and in the account opening paperwork and client agreement that a

client completes prior to entering into a TAMP program. The following description provides an overview of the different TAMP programs offered through LFS. Please refer to the

relevant Form ADV, Part 2A for each TAMP or TAMP program (other than the SEI Mutual Fund Asset Allocation

Program) for a more detailed explanation of each of the TAMP programs offered through LFS.

In each of the TAMP programs described below, LFS provides advisory services including assisting clients in completing

a program questionnaire or similar client profiling tool to gather information about the client’s financial circumstances,

investment objectives, goals, risk tolerance, and time horizon and other pertinent information. Based on this information,

the IAR will assist and provide ongoing advice to clients in selecting or replacing the appropriate TAMP program, asset

allocation strategy, model portfolio or other investment strategy based on the client’s specific needs and goals. Any

information collected through this process may be shared among LFS, the IAR, the TAMP sponsor, the investment manager

selected, the custodian, and any other parties performing services relating to the client’s account.

LFS researches, selects and reviews on an ongoing basis the TAMP programs that are offered through LFS. LFS may use

information provided by the TAMP program sponsor and may also use independent data sources when evaluating a

TAMP program. As with any investment strategy, asset allocation, model or investment portfolio, past performance is no

guarantee of future performance. In addition, forecasts of future performance of financial markets may prove to be incorrect.

Diversification may help spread risk throughout an investment portfolio. Different asset classes have different risk

and potential return profiles and they perform differently in different market conditions. Diversification alone will not

guarantee a profit or protect against a loss.

The IAR will usually present the client with an investment strategy report, proposal or statement that summarizes the

TAMP program’s recommendations based on the information provided by the client. The IAR may, if appropriate and

permitted under the relevant program, suggest modifications to the program’s recommendations to address client-

specific needs. The client may place reasonable restrictions on investments. The asset allocation strategy, model portfolio

or investment strategy that the client selects will be implemented using the mutual funds and/or other investment products

offered through the relevant program. The client will usually appoint the TAMP program sponsor and/or the investment

manager selected as attorney-in-fact and delegate discretionary trading authority to that party. That allows the TAMP

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program sponsor and/or selected investment manager to buy and sell securities in the client’s account without prior approval

from the client for each transaction. Unless otherwise agreed to by LFS and the client, LFS and the IARs generally will not

have any responsibility or authority to buy or sell securities in client accounts held in TAMP programs, or to choose the

initial or ongoing allocation of client assets or to select investment m a n a g e r s . Duties of all parties, including the client,

LFS, IAR, TAMP sponsor and investment manager(s) are further described in the applicable client agreement and the Form

ADV, Part 2A of the TAMP program sponsor and the third-party investment manager (if applicable).

If the client’s financial situation changes or the client would like to change the reasonable restrictions, if any, placed on

their account, the client should notify the IAR, who will notify the TAMP program sponsor. The TAMP program sponsor,

third-party investment manager selected, and/or its affiliates and service providers are responsible for creating and sending

reports to clients, including transaction reporting, performance reporting and tax reporting. LFS and the IAR will not

independently audit third-party TAMP program performance information to determine or verify its accuracy and will not

calculate or audit the performance reports that TAMP program sponsors send to clients. Clients are strongly encouraged

to carefully review the TAMP sponsor’s and third-party investment manager’s disclosures regarding prior performance to

determine the relevance of the prior performance to the client’s account, and whether the prior performance includes any

hypothetical or back-tested performance information. LFS also strongly encourages clients to review the account statements

provided by the custodian of the client account and compare those statements to any report or statement provided by the

TAMP program.

Solicitor Programs

Prior to June 9, 2017, LFS offered certain TAMP programs where LFS acted as a “solicitor” and referred clients to a

TAMP. In such cases, LFS and the TAMP sponsor had an agreement where the TAMP sponsor compensated LFS for

providing client referrals. In these cases, LFS and the IAR receive referral fees for making the referral, which are

generally referred to as “Solicitor Fees”. In most cases the Solicitor Fees are calculated as a percentage of the client

assets that the TAMP sponsor and/or third-party investment manager manages; however, there may be instances where

the Solicitor Fees are determined in some other fashion. The Solicitor Fees are disclosed to clients and prospective clients

in accordance with Rule 206(4)-3 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), which

governs the payment of fees for client referrals. In most cases, LFS and the IAR maintain an ongoing relationship with the

referred clients and may meet with clients periodically to assist the client in monitoring the account(s) managed by the

third-party investment manager, and to discuss other financial matters that pertain to the client. It is important to

understand that when LFS acts as a solicitor by referring clients to other investment advisers, LFS does not provide

investment advice to the client and does not act in a fiduciary capacity with respect to the referred client’s account.

As of June 9, 2017, LFS stopped offering TAMP programs to new clients through solicitor arrangements; however,

some client accounts referred to TAMP programs under solicitor arrangements prior to that date remain active.

Co-Advisory Programs

LFS has had agreements with TAMP sponsors that offered both solicitor and co-advisory programs. Effective June 9,

2017, LFS only offers c o - a d v i s o r y TAMP programs to new clients. When LFS and a TAMP sponsor have a co-

advisory agreement, each party acts in an investment advisory a n d fiduciary capacity to the client. However, the

TAMP sponsor (or its selected investment manager or sub-adviser) will generally be responsible for investment and

portfolio management responsibilities and functions, including security selection, within the client’s account. The

responsibilities of each party in each investment program will be described in the applicable client agreement and disclosure

documents.

The IAR is responsible for understanding and recommending a TAMP program and investment strategy that is suitable

and in the best interest of the client based on the information obtained about the client’s financial situation, investment

experience, investment objectives, time horizon, and risk tolerance, and other relevant factors. The TAMP sponsor is responsible for implementing the investment strategy and managing the client’s portfolio in

accordance with the selected investment strategy.

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The following general brief descriptions of co-advisory programs and TAMPs listed below are the most significant TAMP

programs currently being offered to LFS clients. For a more complete description of the services offered by, fees paid to,

and compensation earned by these TAMPs, please refer to the TAMP sponsor’s Form ADV disclosure brochure and the

account opening paperwork (including your client agreement) you completed prior to entering into these arrangements.

More information about each of these organizations, including Form ADV and other disclosure documents, can be

found on the SEC’s website at www.adviserinfo.sec.gov.

SEI Investments

LFS has an agreement with SEI Investments Management Corporation (“SIMC”), SEI Investments Distribution Company

and SEI Trust Company (collectively, “SEI”) under which LFS offers various asset allocation and investment advisory

programs sponsored by SEI.

SEI offers an investment management approach that uses actively managed asset allocation to help meet the client’s

objectives. SEI offers a style-specific, multi-manager investment approach to pursue less volatile long-term performance

and attempt to reduce risk. In addition, SEI monitors for style drift that might generate uncompensated risk. Client

portfolios are designed with a diversified asset allocation to provide flexibility to address client needs. SEI provides clients

with a monthly consolidated statement, quarterly performance reports and an annual tax report from SEI. SEI’s programs

may use global diversification and tax-efficient strategies to help reduce realized capital gains and tax liability.

The following SEI programs are offered through LFS:

SEI Mutual Fund Asset Allocation Program. This program offers clients access to actively managed asset allocation

portfolios comprised exclusively of no-load mutual funds advised by SEI (“SEI Funds”). The asset allocation portfolios

are constructed and maintained by SEI based on its capital market assumptions. The IARs assist clients in selecting a

specific asset allocation portfolio that is appropriate for the client based on information the client supplies in response to

an investment questionnaire. The client directs the IAR to instruct SEI Trust Company to purchase and sell SEI Funds

pursuant to the investment objectives and rebalancing parameters selected by the client.

SEI Sub-Advised Programs. This program offers clients access to investment strategy models of investment managers

appointed by SIMC and investment models developed and managed by SIMC. These models include SEI ETF Strategies,

SEI Managed Account Solutions (“MAS”), and SEI Distribution-Focused Strategies (“DFS”) Portfolios, each as defined

in the applicable account application necessary to invest in the noted program. These programs cover a broad spectrum of

investment styles and actively managed asset allocation strategies that include allocations to portfolio managers hired to

manage designated portfolios or individual securities based on specific investment styles and may include an allocation to SEI Funds. The client appoints SEI to manage the assets invested in each of these programs in accordance with a strategy

selected by the client. SEI may delegate its responsibility for security selection to one or more portfolio managers. A

description of DFS and MAS, including the services provided and related fees, can be found in SIMC’s Wrap Fee Program

Brochure.

SEI may impose minimum account balances ranging from $50,000 to $1,000,000 depending upon the strategy chosen.

The minimum account size for each of SEI’s programs is set at SEI’s discretion and may be negotiable or waived at the

discretion of SEI.

GoalLink and Integrated Managed Accounts Programs. Through GoalLink, the IARs are responsible for analyzing the

client’s current financial situation, return expectations, risk tolerance, time horizon, and asset class preference. Using the

GoalLink Presentation Tool, the IAR and the client select an investment strategy (“Strategy”), which is then submitted

and reviewed by a representative of SEI.

The Strategy may include a combination of individual securities and SEI Funds, based upon the client’s selected Strategy

and account size. The account minimums are determined at the discretion of SEI and may range from $25,000 to $250,000.

SEI may waive or modify the minimum account size at its discretion. SEI will have investment authority over the client’s

assets invested pursuant to the Strategy and will make prescribed adjustments to the Strategy weights based on market

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conditions. SEI’s investment authority is effective until changed or revoked in writing. SEI may delegate its day-to-day

responsibility for selecting particular securities to one or more portfolio managers. The IAR will explain to the client which SEI Funds are available within the client’s SEI account and explain the rebalancing

guidelines used in the management of the portfolio. SEI is responsible for rebalancing the SEI account pursuant to the

standard variances established by SEI. SEI will notify LFS when quarterly reallocation of the model portfolio is deemed

necessary by SEI. SEI will proceed with the portfolio reallocation unless otherwise instructed by the client.

The client retains the authority to change between the model portfolios, although variation from SEI’s specific asset

allocation within each model may subject the client agreement and/or account to termination. All dividends and capital

gain distributions paid by the SEI Funds in the client’s SEI account will automatically be reinvested unless client provides

written instructions not to reinvest dividends and/or other distributions to SEI.

For more information on the SEI program and/or the investment solutions offered by SEI, including minimums and fees,

please refer to the SIMC disclosure brochure:

https://www.lfg.com/wcs-static/pdf/SEI%20Investments%20Management%20Corporation.pdf.

AssetMark, Inc.

LFS offers asset allocation and advisory services sponsored by AssetMark, Inc. (“AssetMark”). For accounts established

up to and including June 9, 2017, LFS offered these services under a solicitor model or a co-adviser model through the

programs listed below. For accounts established after June 9, 2017, LFS offers the AssetMark services only through a co-

adviser model. Under the solicitor model, IARs solicited clients for AssetMark’s asset allocation and advisory services.

Under the co-adviser model, LFS and the IARs offer AssetMark’s asset allocation system, in which clients are introduced

to investment managers who provide discretionary management of individual portfolios of equity and/or fixed income

securities. Clients may also invest in model portfolios of mutual funds, ETFs and variable annuity sub-accounts created

and maintained by institutional investment strategists.

LFS and the IARs do not have any responsibility or authority to determine the investment managers made available in

the AssetMark platform, or to add or remove investment managers from that platform. In addition, LFS and the IARs have

no responsibility to determine how AssetMark or the investment managers allocate client assets, to buy or sell securities

or other investments for client accounts, or to select broker-dealers with which transactions will be effected. All decisions

with respect to the availability of investment managers and other service providers will be made by AssetMark. The

selection of specific investment managers and broker-dealers used in connection with a specific client account will be made

by the client during the account opening process or by subsequently providing authorization of any such selection to LFS,

the IAR and/or AssetMark. Trading authorization will be granted by client to AssetMark or another portfolio strategist

under the terms of the investment advisory agreement governing the AssetMark program.

The following AssetMark investment advisory programs and services are currently offered through LFS:

Guided Portfolios:

• GPS Fund Strategies;

• GPS Select; and

• Custom GPS Select;

Single Strategy Solution Types:

• Mutual Fund Accounts (including Market Blend and Individual Mutual Fund Solution Types);

• ETF Accounts (including Market Blend); and

• Mutual Fund/ETF Blend Accounts;

Privately Managed Accounts (“PMA”) or Separately Managed Accounts (“SMA”), including:

• Individually Managed (“IMA”) Accounts (Equity Balanced, Fixed-Income, and Custom High-Net Worth);

Savos Unified Managed Accounts (“Savos UMAs”), including:

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• Savos Preservation Strategy;

• GMS Accounts;

• Privately Managed Portfolios (“PMP”) Accounts;

• US Risk Controlled Strategy; and

• Savos Wealth Custom Portfolios;

Multiple Strategy Accounts; and

Guided Income Solutions.

The portfolio strategists used in mutual fund, ETF, mutual fund/ETF blend, and IMA accounts are selected by AssetMark

in order to provide a wide range of investment options and philosophies. AssetMark serves as the portfolio strategist for

the GPS Fund Strategies. Aris, a division of AssetMark, serves as the portfolio strategist for the Asset Builder, Personal

Values, and Income Builder strategies.

For more information on the AssetMark program and/or the investment solutions offered by AssetMark, including

minimums and fees, please refer to the AssetMark disclosure brochure:

https://www.lfg.com/wcs-static/pdf/AssetMark,%20Inc..pdf.

Morningstar Investment Services, LLC

LFS offers clients the Morningstar® Managed Portfolios Program sponsored by Morningstar Investment Services, LLC

(“MIS”). This investment advisory program includes access to mutual fund asset allocation and focused strategy portfolios

(“Mutual Fund Portfolios”), ETF strategy portfolios (“ETF Strategy”), and select stock basket strategy portfolios (“Stock

Baskets”). The minimum initial investment to open an account is $50,000 for the Mutual Fund Portfolios, $100,000 for the

ETF Strategy, and generally is $100,000 for Stock Baskets. Some Stock Baskets have a $250,000 minimum investment

requirement. Minimum investment requirements may be modified, waived or negotiated at MIS’s discretion.

Clients will sign an investment management agreement giving MIS discretionary authority to buy and sell mutual

funds, ETFs, and other securities, as appropriate, in order to invest and manage the client’s assets based on the client’s

selected portfolio and any restrictions. Rebalancing will typically occur quarterly and reallocation will occur as frequently

as MIS considers necessary.

For more information on the Morningstar® Managed Portfolios Program and/or the investment solutions offered by

MIS, including minimums and fees, please refer to the MIS disclosure brochure:

https://www.lfg.com/wcs-static/pdf/Morningstar%20Investment%20Services,%20Inc..pdf.

Brinker Capital

Brinker Capital (“Brinker”) provides discretionary and non-discretionary investment management services to meet the

needs of individual clients. Investment services include model portfolios that are comprised of mutual funds and/or ETFs

created and maintained by Brinker, and/or Brinker’s separately managed accounts. Additional information as to the

services offered by Brinker and fees associated with those services may be found in your client agreement and Brinker’s

disclosure brochure: https://www.lfg.com/wcs-static/pdf/Brinker%20Capital,%20Inc..pdf.

Hanlon Investment Management

Hanlon Investment Management (“Hanlon”) provides discretionary investment management services to meet the needs of

individual clients. Hanlon utilizes stocks, bonds, mutual funds, ETFs, and/or variable annuity subaccounts to create an

investment strategy for each client. Additional information as to the services offered by Hanlon and fees associated with

those services may be found in your client agreement and in Hanlon’s disclosure brochure:

https://www.lfg.com/wcs-static/pdf/Hanlon%20Investment%20Management,%20Inc..pdf.

Symmetry Partners LLC

Symmetry Partners LLC (“Symmetry”) provides discretionary investment management services to meet the needs of

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individual clients. Symmetry creates model portfolios constructed and maintained by Symmetry using open-ended mutual

funds and/or ETFs. Additional information as to the services offered by Symmetry and fees associated with those services

may be found in your client agreement and Symmetry’s disclosure brochure:

www.lfg.com/wcs-static/pdf/Symmetry%20Partners,%20LLC.pdf.

CLS Investments LLC

CLS Investments LLC (“CLS”) provides discretionary and non-discretionary investment management services to meet the

needs of individual clients. CLS offers model-based strategies that utilize stocks, bonds, mutual funds, ETFs, and/or variable

annuity subaccounts. Additional information as to the services offered by CLS and fees associated with those services may

be found in your client agreement and CLS’s disclosure brochure:

https://www.lfg.com/wcs-static/pdf/CLS%20Investments,%20LLC.pdf.

City National Rochdale, LLC

City National Rochdale, LLC (“Rochdale”) provides discretionary investment management services to meet the needs of

individual clients with portfolios of $1 million and above. Rochdale creates model portfolios or individualized management

services utilizing stocks, bonds, mutual funds, and ETFs. Additional information as to the services offered by Rochdale

and fees associated with those services may be found in your client agreement and Rochdale’s disclosure brochure:

www.lfg.com/wcs-static/pdf/City%20National%20Rochdale,%20LLC.pdf.

Flexible Plan Investments LTD

Flexible Plan Investments LTD (“Flexible Plan”) provides discretionary investment management services to meet the needs

of individual clients Flexible Plan’s services encompass various strategies with differing objectives to enable clients to

receive personalized investment management utilizing mutual funds, ETFs, and/or variable annuity subaccounts. Additional

information as to the services offered by Flexible Plan and fees associated with those services may be found in your client

agreement and Flexible Plan’s disclosure brochure:

https://www.lfg.com/wcs-static/pdf/Flexible%20Plan%20Investments,%20Ltd.pdf.

Pacific Financial Group Inc.

Pacific Financial Group Inc. (“Pacific”) provides discretionary and non-discretionary investment management services to

meet the needs of individual clients. Pacific offers model portfolios created and maintained by Pacific containing mutual

funds and ETFs, and/or Pacific’s separately managed accounts. Additional information as to the services offered by

Pacific and fees associated with those services may be found in Pacific’s disclosure brochure: https://www.lfg.com/wcs-

static/pdf/The%20Pacific%20Financial%20Group.pdf.

For more information on these T A M P programs, please refer to the Form ADV, Part 2A and related disclosure

documents for the investment adviser and program in question. These documents can be found on the SEC’s website at

www.adviserinfo.sec.gov/ and on the applicable program sponsor’s website.

Limited Arrangements

LFS offers other TAMP or asset management programs in addition to those listed above on a limited basis. This may

occur when a representative joins LFS and is using another firm for asset management services, or where there is another

unique need that isn’t met by the other programs that LFS offers. This may also occur when LFS has historical or legacy TAMP

or asset manager arrangements but has not yet closed the programs and required clients to move to new programs. These programs

follow the same general format and fee structure as the programs described above.

For more information on these programs, please refer to the Form ADV, Part 2A and related disclosure documents for the

applicable TAMP program sponsor, TAMP program, and/or third-party investment manager or adviser. These documents

can be found on the SEC’s website at www.adviserinfo.sec.gov and on the applicable TAMP program sponsor’s website.

12

Financial Planning Services

LFS does not require a minimum account size for financial planning services, nor does it require that financial planning

clients maintain either a brokerage or advisory account with LFS.

Financial Analyses and Plans

LFS, through the IARs, provides clients with financial analyses and plans through a written service agreement. Under the

written service agreement, the IAR will consult with the client to obtain information regarding the client, which may

include the client’s assets, liabilities, present and foreseeable future obligations, present and future income, financial goals,

and other data related to the foregoing. Once the information has been gathered, the IAR will furnish the client with a

financial analysis and plan that will include some or all of the following:

• Summary of client’s present financial situation that may include a statement of net worth, cash flow model, current

allocation of assets and other related analyses, as applicable.

• Summary of financial and insurance goals that may include such topics as retirement planning and estate

planning, indicating shortfalls and/or overages client may experience, using assumed interest rates, inflation rates,

estimates of current and future income and living expenses and/or other factors and contingencies.

• General advice concerning the client’s financial and insurance objectives that may include potential strategies to

pursue such objectives, the repositioning of current assets and the directing of current and future invested assets.

This financial analysis and plan will consist of a computer-generated program drawing on statistical samples and will be

designed to provide general guidance toward accomplishing stated investment and insurance goals. The operation of

these computer programs cannot be altered by the IAR. Where the software vendors who supply the programs are

unaffiliated with LFS, LFS is not responsible for any aspect of these software programs.

LFS, through the IARs, will deliver a written financial analysis and plan to the client in hard copy or electronic format

and shall contact the client for a review of the plan. After this review, LFS’ obligations to the client with respect to the

financial analysis and plan shall terminate. Any necessary updates to the financial analysis and plan, or execution of

any of the recommendations made in the plan, shall be at the sole discretion of the client. LFS and the IAR will be

under no obligation to update the financial analysis and plan or to monitor the changes in the client’s financial

circumstances, investments and/or insurance in connection with the financial analysis and plan services.

Financial analyses and plans provided by LFS will not make recommendations for specific investment or insurance

products. Clients are not obligated to use LFS or the IAR to purchase specific securities or insurance or pursue any

investment strategy. Clients may obtain legal, accounting, and other investment services from any professional source to

implement any generic recommendations made by LFS. If the client elects LFS as the broker-dealer of record when

purchasing any financial products, the IAR will likely receive commissions and/or other compensation as a registered

representative of LFS in its capacity as a broker-dealer. The IAR may give specific product recommendations regarding

investments in his or her separate role as a registered representative of LFS, as opposed to his or her role as an IAR in

connection with a financial analysis and plan, if the client relationship extends to that phase. IARs are separately

compensated in the form of commissions or investment fees for this broker-dealer service. Recommendations developed

by an IAR are based upon the professional judgment of the IAR and neither LFS nor the IAR can guarantee the results

of these recommendations.

IARs may send newsletters to their clients and prospective clients. These newsletters may be prepared by LFS or by an

approved third-party newsletter service.

Neither LFS nor the IARs are qualified to render legal or tax advice, and they do not offer legal or tax advice at any

time. Clients are encouraged to consult a competent attorney or tax specialist with respect to any recommendations or

other matters reviewed that may require a legal or tax opinion.

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Neither the financial analysis and plan nor the consultation services will provide specific advice regarding life insurance.

If requested, the IAR may offer, without charge, a life insurance analysis from an agent of LFS and/or an affiliate of

LFS who is a licensed life insurance agent. This life insurance analysis is separately available without any investment

advisory services at no charge. LFS and/or its affiliates will receive compensation for this analysis and/or recommendation

only in the form of life insurance commissions in the event that it sells a life insurance policy to the client.

LFS’ planning services are advisory only. Any information relating to the tax considerations affecting your financial

arrangements or transactions is not intended to be tax advice and should not be relied upon as such. Neither LFS

nor IARs provide tax, legal or accounting advice, or other professional services.

Other Types of Planning Services

Client Consultation Services

LFS, through the IARs, offers consultation services and provides general investment advice or guidance to clients through

a written service agreement. This consulting service may include:

• A review of the client’s current investment portfolio prepared by an entity other than

LFS or its advisory representatives.

• A review of the client’s comprehensive financial plan or any portion thereof, prepared by an entity other than LFS

or its advisory representatives.

• The discussion of a generic investment portfolio or investments in general with the client, not involving any

specific investment recommendations.

• A review of a client’s current retirement plan, estate plan, or college funding plan.

• A review of financial documents at the request of other professionals, including, but not limited to, attorneys and

accountants.

The consultation service does not include recommendations on, nor does it obligate the client to purchase, specifically

named investment or insurance products. Clients are not obligated to use LFS as the broker-dealer to purchase specific

securities or insurance. Clients may obtain legal, accounting and investment services from any professional source to

implement any generic recommendations made by an IAR. If the client elects LFS as the broker-dealer of record when

purchasing any financial products to implement any recommendations, the IAR will receive commissions and/or other

compensation as a registered representative of LFS in its capacity as a broker-dealer. The IAR may give more specific

product recommendations regarding investments in his or her separate role as a registered representative of LFS, in its

capacity as a broker-dealer, as opposed to his or her role as an IAR of LFS in connection with a consultation, if the client

relationship extends to that phase.

IARs are separately compensated in the form of commissions or investment fees for this broker-dealer service.

Recommendations developed by an IAR are based upon the professional judgment of the IAR and neither LFS nor the

IAR can guarantee the results of these recommendations. After the consultation is complete, the obligation from LFS to

the client will terminate and neither LFS nor the IARs will be under any obligation to update or to monitor the client’s

investment and insurance portfolios in connection with the consultation services.

The written service agreement signed by the client and the IAR for financial analysis, planning, and consulting services

will be presented to an officer of LFS for approval before the agreement becomes effective. The client may terminate the

agreement at any time during its term by providing LFS written notice. In such case the client will be responsible for

payment of all advisor fees, charges and transactions incurred from the date the agreement was executed through the time

it is terminated. In the event the client does not wish to provide the information necessary for LFS to prepare the financial

analysis and plan, LFS must be notified in writing on or before the twelve-month anniversary of the date of the acceptance

by LFS of the agreement. Upon notification, the obligation to perform the financial analysis, planning, and consultation

service will be terminated. However, any fees previously paid will be retained by LFS, and any unpaid fees for services

14

performed will become immediately due and payable. The agreement may be terminated by LFS at any time by giving the

client written notice, at which time any prepaid fees for services not yet performed will be refunded to the client.

LFS and the IARs may also provide financial consultation services without charging a separate fee for these services. If

no separate fee is charged, a written service agreement may or may not be utilized in connection with these services. If

the client elects to implement any transactions in securities or other financial products as a result of the financial

consultation services and elects to use LFS and/or an LFS financial professional for implementation, LFS and/or the LFS

financial professional will generally receive commissions, fees, and/or other compensation in the process of

implementation.

Seminars

IARs offer investment seminars to the public, including groups of employees and associates and other organized groups,

generally using approved third-party seminar programs. Seminars generally focus on various areas of financial planning,

such as estate planning, investment planning, retirement planning, and business succession planning, and may include a

generic discussion of a wide variety of investment and insurance products. The investment information provided with this

service is not intended to meet the objectives of each individual client. Fees for these seminars are negotiable and may

be charged on a flat fee basis or per seminar attendee.

Implementation of Financial Plans

The services included in the planning process are limited to recommending strategies for the client to consider. Clients

are in no way obligated to implement any recommendations and are not obligated to do so through an IAR. The

implementation of any recommended strategies is entirely at the client’s discretion.

The recommendations provided may be implemented through LFS, its affiliates or other financial services providers. LFS

cannot guarantee future financial results or the achievement of your financial goals through implementation of

recommendations provided to you. LFS does not monitor the day-to-day performance of your specific investments as part

of its financial planning or financial consulting services. Before implementing any recommendations, you should consider

carefully the risks and potential benefits of purchasing products or services, and you are encouraged to seek further advice

from your lawyer, accountant, tax specialist or other professional advisors, particularly in connection with estate planning,

taxes, or small business owner planning issues as may be applicable.

In addition to creating plans for clients, IARs offer insurance and investment products issued or managed by other

Lincoln Financial Group affiliates, as well as insurance and investment products of unaffiliated firms. To minimize

conflicts between the IAR’s roles in the sale of products, financial plans contain only generic recommendations regarding

general types of insurance and investment products. In the financial planning process, the IAR does not make

recommendations regarding the purchase of specific insurance or investment products.

If a client chooses to implement their financial plan through LFS, the LFS financial professional will be acting as a

salesperson in the sale of investment and insurance products, and/or in an investment advisory capacity in managing client

assets or recommending investment managers to client. A client who makes the decision to implement the product

recommendations in their plan through Lincoln Financial Group companies will have access to a broad portfolio of

insurance and investment products. Insurance products may include life insurance, disability and annuity products

manufactured by Lincoln Financial Group companies and other unaffiliated companies. Investment products accessible

through LFS financial professionals are restricted to products approved for sale by LFS. LFS, in its role as investment

adviser, also offers asset management investment programs.

Retirement Plan Consulting Program

LFS offers consulting and advisory services for employer-sponsored retirement plans (“Plans”) that are designed to assist

Plan sponsors (“Sponsors”). LFS may also assist Sponsors with enrollment and/or providing investment education to

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Plan participants and beneficiaries. LFS provides these retirement plan services (“Retirement Plan Services”) through IARs

and may charge a fee for the Retirement Plan Services, as described in this Brochure and the Retirement Plan Consulting

Agreement (“Agreement”).

Retirement Plan Services include services that would be considered fiduciary services or non-fiduciary services under

the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or comparable state laws, rules and

regulations.

As of April 1, 2019, new client engagements, as well as changes in services or compensation for existing client engagements,

will trigger a conversion to a new service model (the “Updated Service Model”). The Updated Service Model will only

make available non-fiduciary services to the Plan for commission-based client engagements but will continue to allow for

certain ERISA fiduciary services for fee-based client engagements. For commission-based engagements, IARs will only

provide non-fiduciary point-in-time recommendations on the sale of retirement plan products and other non-fiduciary

services, and IARs will not act as fiduciaries to the Plan under ERISA. For fee-based client engagements, IARs may offer

ERISA fiduciary investment advice regarding the Plan’s Designated Investment Alternatives (“DIAs” or more commonly

known as the Plan’s “fund lineup”) and Qualified Default Investment Alternative (“QDIA”), along with other services to

Plans, Sponsors and Plan participants.

In certain limited arrangements as agreed to in writing between a Sponsor and LFS, LFS may provide the Sponsor’s Plan

participants limited point-in-time advice which could also be deemed ERISA fiduciary advice.

When delivering fiduciary services to a Plan, LFS will act in good faith and with the degree of diligence, care and skill that

a prudent person rendering similar services would exercise under similar circumstances. When providing any fiduciary

services to a Plan and/or Sponsor, LFS will solely be making recommendations to Sponsor and Sponsor retains full

discretionary authority and control over assets of the Plan. When providing any fiduciary services to a Plan participant in

connection with Retirement Plan Services, LFS will solely be making recommendations to participant and participant

retains full discretionary authority and control over assets of the participant’s account. Sponsor may engage LFS to perform

Retirement Plan Services by providing information about the Plan, including the Plan design, Plan objectives, investment

objectives, investment risk tolerance, demographics about Plan participants, and third-party service providers, and by

executing an Agreement. LFS will provide Sponsor a copy of this Brochure or a comparable brochure and the Agreement

for review. The Agreement describes the terms of the arrangement between LFS and Sponsor, including a description of

the Retirement Plan Services and the fees to be charged by LFS. By signing the Agreement, Sponsor represents that

Sponsor has received sufficient information and determined that the Retirement Plan Services selected are: (i) necessary

for the operation of the Plan and (ii) reasonable and appropriate based upon the compensation to be paid for the Retirement

Plan Services. Sponsor must sign and submit the Agreement to LFS before LFS performs any Retirement Plan Services.

A description of the Retirement Plan Services is as follows.

Sponsor Services – Advice and Recommendations Under the Legacy Service Model

Advice Regarding the Plan’s Investment Policy Statement (“IPS”). IAR will review the Plan’s investment objectives,

risk tolerance and goals with the Sponsor or other third-party plan fiduciary (“Plan Fiduciary”), and educate the Plan

Fiduciary about investment theories including investment objectives, risk return characteristics, historical return and

prospectus information on investment alternatives available through the Plan’s provider. If the Plan does not have an IPS,

the IAR will provide recommendations to the Plan Fiduciary to assist with establishing an IPS. If the Plan has an IPS, IAR

will review it for consistency with the Plan’s objectives. If the IPS does not represent the Plan’s objectives, IAR will

make recommendations to align the IPS with the Plan’s objectives. The Plan Fiduciary retains decision-making authority

with respect to the terms and conditions of the IPS. Advice Regarding the Plan’s DIAs and QDIA. Based on the Plan’s IPS or other guidelines established by the Plan, IAR

will review the investment options available to the Plan and will make recommendations to assist the Plan Fiduciary

with respect to selecting the DIAs to be offered to Plan participants, and with respect to selecting or replacing the QDIA.

Once the Plan Fiduciary selects the DIAs and QDIA, IAR will, on a periodic basis and/or upon reasonable request, provide

reports, information and recommendations to assist the Plan Fiduciary in fulfilling the Plan Fiduciary’s duty to

16

monitor the Plan’s investments. If the Plan Fiduciary elects to remove a DIA, IAR will provide information, analysis

and recommendations to assist the Plan Fiduciary with the evaluation of replacement investment alternatives. The Plan

Fiduciary retains decision-making authority to select, remove and/or replace Plan investments.

Advice Regarding Third-Party Investment Managers. Based on the Plan’s IPS or other investment guidelines established

by the Plan, IAR will review the potential investment managers available to the Plan and will make recommendations to

assist the Plan Fiduciary in selecting one or more investment managers to advise on and/or manage some or all of the Plan’s

investments. Once the Plan Fiduciary approves an investment manager, IAR will provide reports, information and

recommendations, on a periodic basis or upon reasonable request, to assist the Plan Fiduciary in fulfilling its duty to monitor

the Plan’s investment managers. If the Plan Fiduciary elects to remove an investment manager, IAR will provide information,

analysis and recommendations to assist the Plan Fiduciary with the evaluation of replacement investment managers. The

Plan Fiduciary retains decision-making authority with respect to the investment managers used in connection with the Plan.

Sponsor Services – Evaluation, Education and Training Under the Legacy Service Model Educating and Supporting Plan Fiduciary/Committee. IAR will assist the Plan Fiduciary with the establishment of the Plan

committee and protocols designed to help the Plan Fiduciary establish processes and governance to prudently manage and

administer the Plan. The Plan Fiduciary is solely responsible for appointing and removing Plan committee members. IAR

may provide education to Plan committee members on their fiduciary duties and assist the Plan committee with the

coordination of regular meetings. Upon reasonable request, IAR may also educate the Plan Fiduciary and Plan committee

members regarding the Plan’s structure, metrics, services and expenses as compared to similar retirement plans (e.g.,

participation rates, employer contributions, vesting time frames, loan availability, etc.). The Plan Fiduciary retains decision-

making authority with respect to the structure and features of the Plan. IAR may also update the Plan Fiduciary about

current and proposed legislative and regulatory initiatives. Assisting With Plan Service Provider Evaluation Process and Oversight. IAR may assist the Plan Fiduciary with

establishing a process to evaluate, select and monitor the Plan’s service providers. IAR may utilize third-party tools and

publicly available data to assist the Plan Fiduciary with benchmarking the fees charged by a service provider. The

Plan Fiduciary retains decision-making authority to select, remove and/or replace the Plan’s service providers. These

services may include any of the following:

• IAR may recommend procedures to track the receipt and evaluation of disclosures provided by “covered” service

providers under Section 408(b)(2) of ERISA;

• IAR may assist the Plan Fiduciary with creating formal requests for proposals from prospective service

providers; the collection and evaluation of information received in response to such requests; and coordinating

final interviews and presentations;

• IAR may assist Sponsor with converting or merging the Plan; and

• IAR may act as a liaison with the Plan’s third-party service providers on behalf of

Sponsor.

Participant Services – Evaluation, Education and Training Under the Legacy Service Model Facilitate Group Enrollment Meetings and Participant Investment Education. IAR will conduct periodic group enrollment

and education meetings with employees and educational meetings with Plan participants and beneficiaries. IAR may

provide information and materials that inform a participant or beneficiary about the benefits of Plan participation, the

benefits of increasing Plan contributions, the impact of preretirement withdrawals on retirement income, the terms of the

Plan including the Plan’s fees and expenses, or the operation of the Plan. IAR may also provide educational information

concerning the Plan’s DIAs (e.g., general asset classes, investment objectives and philosophies, risk and return

characteristics, historical return information, and/or related prospectuses of the Plan’s DIAs).

IAR may also provide information and materials that inform a P l a n participant or beneficiary about: (i) general

financial and investment concepts, such as risk and return, diversification, dollar cost averaging, compounded return, and

tax deferred investment; (ii) historical differences in rates of return between different asset classes (e.g., equities, bonds,

17

or cash) based on standard market indices; (iii) the effects of inflation; (iv) estimating future retirement income needs;

(v) determining investment time horizons; and (vi) assessing risk tolerance.

The information and materials described above relate to the Plan and Plan participation, without reference to the

appropriateness of any individual DIA for a particular participant or beneficiary under the Plan or are general financial

and investment information that have no direct relationship to the Plan’s DIAs. In conducting this service, the IAR will

not provide Plan participants or beneficiaries with “investment advice” as that term is defined under ERISA.

Assist Participants with Financial Wellness Education, Retirement Readiness, and/or Gap Analysis. IAR may conduct

group meetings with Plan participants and beneficiaries to provide education on assessing retirement income needs.

Using tools available through the Plan or approved third parties, IAR will assist Plan participants and beneficiaries in

conducting “gap” analyses to determine whether their current investment objectives and savings rates are sufficient to

provide for future income needs during retirement. IAR may provide assistance to Plan participants and beneficiaries in

creating retirement income plans.

The information and materials described above relate to the Plan and Plan participation, without reference to the

appropriateness of any individual DIA for a particular participant or beneficiary under the Plan or are general financial

and investment information that have no direct relationship to the Plan’s DIAs. In conducting this service, the IAR will not

provide Plan participants or beneficiaries with “investment advice” as that term is defined under ERISA.

Participant Investment Advice. IAR will meet with Plan participants periodically or upon reasonable request to collect

information necessary to identify the participant’s investment objectives, risk tolerance, time horizon and other pertinent

information. IAR will provide recommendations to assist the participant with investing the participant’s assets held in the

Plan, using the Plan’s DIAs, model portfolios available in the Plan, if any, or in selecting one or more investment managers.

Unless the participant grants trading authority to IAR, an investment manager or another party through a separate written

document, participant will retain sole discretion over the investment of participant’s account.

Sponsor Services – Advice and Recommendations Under the Updated Service Model

Advice Regarding the Plan’s DIAs and QDIA. Based on the Plan’s IPS or other guidelines established by the Plan, IAR

will review the investment options available to the Plan and will make recommendations to assist the Plan Fiduciary with

respect to selecting the DIAs to be offered to Plan participants, and with respect to selecting or replacing the QDIA. Once

the Plan Fiduciary selects the DIAs and QDIA, IAR will, on a periodic basis and/or upon reasonable request, provide

reports, information and recommendations to assist the Plan Fiduciary in fulfilling the Plan Fiduciary’s duty to monitor

the Plan’s investments. If the Plan Fiduciary elects to remove a DIA, IAR will provide information, analysis and

recommendations to assist the Plan Fiduciary with the evaluation of replacement investment alternatives. The Plan

Fiduciary retains decision-making authority to select, remove and/or replace Plan investments.

Sponsor Services – Evaluation, Education and Training Under the Updated Service Model

Educating and Supporting Plan Fiduciary/Committee. IAR will assist the Plan Fiduciary with the establishment of the Plan

committee and protocols designed to help the Plan Fiduciary establish processes and governance to prudently manage and

administer the Plan. The Plan Fiduciary is solely responsible for appointing and removing Plan committee members. IAR

may provide education to Plan committee members on their fiduciary duties and assist the Plan committee with the

coordination of regular meetings. Upon reasonable request, IAR may also educate the Plan Fiduciary and Plan committee

members regarding the Plan’s structure, metrics, services, and expenses as compared to similar retirement plans (e.g.,

participation rates, employer contributions, vesting time frames, loan availability, etc.). The Plan Fiduciary retains decision-

making authority with respect to the structure and features of the Plan. IAR may also update the Plan Fiduciary about current

and proposed legislative and regulatory initiatives. IAR may help the Plan Fiduciary compare the updates to existing procedures.

In conducting this service, IAR will not provide the Plan Fiduciary with “investment advice” as that term is defined under

ERISA.

18

Periodic Review of the Plan’s IPS. IAR will periodically review the Plan’s IPS as provided by the Plan Fiduciary in the

context of Plan objectives. IAR will assist the Plan Fiduciary in establishing governance related to the Plan’s investment

policies and IPS. IAR may educate the Plan Fiduciary about investment theories including investment objectives, risk return

characteristics, historical return and prospectus information on investment alternatives available through the Plan’s provider,

which the Plan Fiduciary may use in developing and/or updating the Plan’s IPS. The Plan Fiduciary retains decision-making

authority with respect to the terms and conditions of the IPS. In conducting this service, IAR will not provide the Plan

Fiduciary with specific investment product recommendations or "investment advice" as that term is defined under ERISA.

Point in Time Review and Monitoring Support of the Plan’s Investment Product Selection, DIAs and/or QDIA. Based on

the Plan’s IPS or other guidelines established by the Plan as provided to the IAR, the IAR will review the investment

product(s) available to the Plan and may make one-time, point in time recommendations to the Plan Fiduciary with respect

to selecting the investment product(s). The IAR may also provide one-time, point in time assistance to the Plan Fiduciary

in selecting the initial list of DIAs to be offered to Plan participants, and the selection of the QDIA. Once the Plan Fiduciary

selects the investment product(s), DIAs, and QDIA, IAR may, on a periodic basis and/or upon reasonable request, provide

reports and information to assist Plan Fiduciary with monitoring the DIAs. The Plan Fiduciary retains decision-making

authority to select, remove and/or replace Plan investment products, DIAs and the QDIA. In conducting this service, IAR

will not provide the Plan Fiduciary with "investment advice" as that term is defined under ERISA.

Assisting with Plan Service Provider Evaluation Process and Oversight. IAR may assist the Plan Fiduciary with establishing

a process to evaluate, select and monitor the Plan’s service providers. IAR may utilize third-party tools and publicly available

data to assist the Plan Fiduciary with benchmarking the fees charged by a service provider. The Plan Fiduciary retains

decision-making authority to select, remove and/or replace the Plan’s service providers. These services may include any

of the following:

• IAR may recommend procedures to track the receipt and evaluation of disclosures provided by “covered” service

providers under Section 408(b)(2) of ERISA;

• IAR may assist the Plan Fiduciary with creating formal requests for proposals from prospective service providers;

the collection and evaluation of information received in response to such requests; and coordinating final

interviews and presentations;

• IAR may assist Plan Fiduciary with converting or merging the Plan; and

• IAR may act as a liaison with the Plan’s third-party service providers on behalf of Plan Fiduciary.

In conducting this service, IAR will not provide the Plan Fiduciary with “investment advice” as that term is defined

under ERISA.

Point in Time Review and Monitoring Support of Third-Party Investment Managers and Investment Advice Providers.

Based on the Plan’s IPS or other investment guidelines established by the Plan and provided to the IAR, the IAR will

review the third-party investment managers and investment advice providers, including service providers designated as

“3(21)” and “3(38)” fiduciary service providers, available to the Plan and may provide point in time assistance to the Plan

Fiduciary in selecting a third-party advisor or investment manager to advise on and/or manage some or all of the Plan’s

DIAs, QDIA, or other Plan investments. Once Plan Fiduciary selects one or more investment managers or investment

advisers, IAR may provide reports and information, on a periodic basis or upon reasonable request, to assist the Plan

Fiduciary with monitoring the third-party adviser or investment manager(s). The Plan Fiduciary will retain decision-

making authority with respect to the third-party advisers and investment managers used in connection with the Plan. In

conducting this service, IAR will not provide the Plan Fiduciary with "investment advice" as that term is defined under

ERISA.

Participant Services Under the Updated Service Model

Facilitate Group Enrollment Meetings and Participant Investment Education. IAR will conduct periodic group enrollment

and education meetings with employees and educational meetings with Plan participants and beneficiaries. IAR may

19

provide information and materials that inform a participant or beneficiary about the benefits of Plan participation, the

benefits of increasing Plan contributions, the impact of pre-retirement withdrawals on retirement income, the terms of the

Plan, including the Plan’s fees and expenses, or the operation of the Plan. IAR may also provide educational information

concerning the Plan’s DIAs (e.g., general asset classes, investment objectives and philosophies, risk and return

characteristics, historical return information, and/or related prospectuses of the Plan’s DIAs). IAR may also provide

information and materials that inform a Plan participant or beneficiary about: (i) general financial and investment

concepts, such as risk and return, diversification, dollar cost averaging, compounded return, and tax deferred investment;

(ii) historical differences in rates of return between different asset classes (e.g., equities, bonds, or cash) based on standard

market indices; (iii) the effects of inflation; (iv) estimating future retirement income needs; (v) determining investment

time horizons; and (vi) assessing risk tolerance.

The information and materials described above relate to the Plan and Plan participation, without reference to the

appropriateness of any individual DIA for a particular participant or beneficiary under the Plan or are general financial

and investment information that have no direct relationship to the Plan’s DIAs. In conducting this service, IAR will not

provide Plan participants or beneficiaries with “investment advice” as that term is defined under ERISA.

Assist Participants w ith Financial Wellness Education, Retirement Readiness, and/or Gap Analysis. IAR may conduct

group meetings with Plan participants and beneficiaries to provide education on assessing retirement income needs. Using

tools available through the Plan or approved third parties, IAR will assist Plan participants and beneficiaries in conducting

“gap” analyses to determine whether their current investment objectives and savings rates are sufficient to provide for future

income needs during retirement. IAR may provide assistance to Plan participants and beneficiaries in creating retirement

income plans.

The information and materials described above relate to the Plan and Plan participation, without reference to the appropriateness

of any individual DIA for a particular participant or beneficiary under the Plan or are general financial and investment

information that have no direct relationship to the Plan’s DIAs. In conducting this service, IAR will not provide Plan participants

or beneficiaries with “investment advice” as that term is defined under ERISA.

Participant Investment Advice. IAR will meet individually with a Plan participant upon reasonable request by such Plan

participant to collect information necessary to identify the participant’s investment objectives, risk tolerance, time horizon

and other pertinent information. IAR will provide point in time fiduciary “investment advice” as defined under ERISA to

assist the participant with investing the participant’s assets held in the Plan, using the investment product(s) available to the

Plan, the Plan’s DIAs, model portfolios available in the Plan, if any, or in selecting one or more investment managers available

through the Plan. Unless otherwise agreed upon in writing, all “investment advice” will be as of the point in time at which

such “investment advice” is made, and the IAR will have no ongoing duty or obligation to monitor the participant’s account.

Unless the participant grants trading authority to IAR, an investment manager or another party through a separate written

document, participant will retain sole discretion over the investment of participant’s account.

Potential Additional Retirement Services Provided Outside of the Agreement with the Sponsor

In providing Retirement Plan Services, LFS and its IARs may establish a client relationship with one or more Plan

participants or beneficiaries. Such client relationships develop in various ways, including, without limitation: (i) as a result

of a decision by the participant or beneficiary to purchase services from LFS not involving the use of Plan assets; (ii) as

part of an individual or family financial plan for which any specific recommendations concerning the allocation of assets

or investment recommendations relate exclusively to assets held outside of the Plan; or (iii) through an individual

retirement account rollover (“IRA Rollover”). If LFS is providing Retirement Plan Services to a Plan, IARs may, when

requested by a Plan participant or beneficiary, arrange to provide services to that participant or beneficiary through a

separate agreement that excludes any investment advice on Plan assets (but may consider the participant’s or beneficiary’s

interest in the Plan in providing that service). If a Plan participant or beneficiary desires to effect an IRA Rollover, LFS

may provide the participant or beneficiary with a written explanation of the options available to the Plan participant

or beneficiary. Any f i n a l decision to effect the I R A R ollover or about what to do with the IRA Rollover assets

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remains that of the participant or beneficiary. LFS and its affiliates may provide securities brokerage, recordkeeping and other Retirement Plan Services to Plans

and will receive variable compensation for those services. LFS has a conflict of interest where it recommends its Retirement

Plan Services or those of its affiliates because LFS, its employees, and i t s IARs benefit from the compensation paid to

LFS and may directly or indirectly receive a portion of the fees and other compensation paid by Retirement Plan Services

clients. Those clients may also use other products and services available from or through LFS and in such cases will pay

additional compensation. This practice creates a conflict of interest that gives LFS and its IARs an incentive to recommend

Retirement Plan Services based on the compensation t h e y receive. Additionally, fees and commissions may be higher

for some brokerage products, services or Retirement Plan Services, and the remuneration and profitability to LFS, its IARs

and its affiliates resulting from transactions involving some accounts may be greater than the remuneration and

profitability resulting from other accounts, products or Retirement Plan Services. LFS addresses these conflicts through

disclosure in this Brochure and additional disclosures concerning compensation we receive, directly or indirectly,

including certain disclosures that may be required under other federal and state laws that are in addition to the federal

securities law disclosure requirements (e.g., ERISA). LFS will also offset or refund additional compensation it receives

when required by law.

As part of LFS’ service of providing recommendations regarding the selection and monitoring of investment

managers, QDIAs or DIAs, LFS may provide Sponsor a list of investments, including mutual funds, to consider as

options for the Plan, and may provide a list of investment managers to manage the assets of the Plan. Sponsor retains full

authority to select all Plan investments and investment managers. LFS will consider information provided by Sponsor

about the Plan when assisting with or making recommendations about the Plan’s IPS. It is important that information

provided by Sponsor be complete, accurate and current. Changes in the information will impact what assistance or

recommendations may be made so it is important that LFS be accurately and timely informed of any information that may

be relevant to the Plan.

All investments involve risk and investment performance can never be predicted or guaranteed. The values of Plan accounts

will fluctuate (perhaps significantly) due to market conditions, manager performance and other factors. Using any

benchmark or index in connection with the Retirement Plan Services is no promise that the performance of the Plan’s

particular investments will experience the same results, including the results shown on the various reports that are delivered

as part of the Retirement Plan Services. Sponsor or the Plan participants and beneficiaries retain all investment discretion

over Plan assets. Each is free to make his or her own investment decisions. No one is required to accept any assistance

or follow any recommendations provided as part of the Retirement Plan Services. If the Plan adopts LFS’

recommendations regarding the allocation or rebalancing among model portfolios or recommendation of investment

managers, the responsible Sponsor or P l a n participant or beneficiary can freely change allocations or managers.

LFS may use or provide to Sponsor data or information provided by third parties when providing Retirement Plan

Services. While LFS reasonably believes that the information or data is reliable, it does not promise that it is accurate,

current or consistently available. Sponsor is responsible for all tax liabilities arising from any transactions, including any

liabilities arising from the failure to maintain the qualified status of a Plan receiving the Retirement Plan Services.

Any report containing a proposed asset allocation model is based upon a number of factors, which may include the

demographics of Plan participants, current asset allocations and the value of the assets. LFS may change asset

allocations and investment options within the model portfolios and has no obligation to revise the report or otherwise

advise Sponsor if a model or any of LFS’ assumptions change in the future. The analyses and suggested asset allocations

contained in the reports may be based on historical financial data, assumptions about future financial trends (including

market appreciation or decline, rates of return and risks for various asset classes), assumptions about applicable laws and

regulations, and appropriate financial planning strategies. Any projections, analyses or other information contained in or

with the reports regarding various investment outcomes are hypothetical in nature, do not reflect actual investment results

and are not guarantees of future results. The reports do not provide advice regarding the Plan’s specific securities

investments. Therefore, it is important for Sponsor to monitor current events, such as changes in tax laws and in the

financial markets, which may affect Sponsor’s decisions about the Plan. The return rates and dollar figures contained

in reports may not include all investment expenses; thus, any results shown may be reduced by such costs. Also,

where applicable (and only as indicated) assumptions as to federal income tax rates, state income tax rates, and estate taxes

reflected in reports would only be general estimates.

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Item 5: Fees and Compensation

Client Advisory Fees

Some of the investment advisory fees for the TAMP programs described in this Brochure are charged as an “all-

inclusive” bundled fee based on t h e v a l u e o f t h e assets in your account. This bundled fee usually includes a

portfolio management fee, brokerage and transaction costs, and investment advice. However, this bundled fee usually will

not include costs associated with transactions that are executed at broker-dealers other than the one at which your account

is held. These transactions are sometimes called “step-out” trades and are described further below. Fees vary depending

on which programs and services you use. Fees may be billed in arrears or advance, depending on the program and the

terms of your client agreement. Fees typically are charged monthly or quarterly based on the assets held within your

account for services such as ongoing investment advice, investment selection and recommendations, asset allocation,

execution of transactions (depending on the program you are in), custody of securities and account reporting services. In

some programs, the fees a client pays will be based upon the market value of the assets held in the client’s account

as of the last business day of the preceding calendar quarter. In other programs, the fee is calculated based on the

average daily balance of the account in the preceding quarter. Please see the applicable client agreement and disclosure

documents for additional information specific to each program. LFS’ advisory fees generally are negotiable. Some

programs charge an “unbundled” fee in which case the client may pay separate fees for asset management services,

brokerage services, and investment advice. Depending on the program, the client may also be charged brokerage costs for

transactions in the client’s account in addition to the advisory fees. Fees are described in more detail in the applicable

program’s Form ADV, Part 2A and in the applicable client agreement, and the client should refer to those

documents for each of the programs described in this Brochure for a detailed description of, among other things,

fees, calculation methodology, and termination provisions.

In programs that use portfolio managers, a portion of the total fee up to 1.50% of assets under management may be paid to

the portfolio manager for their services. The amount varies by program and by manager and is described in more detail in

the Form ADV, Part 2A of the applicable program and/or portfolio manager.

A client agreement to which LFS is a party may generally be terminated at any time, by either party, for any reason on

30 days written notice. Upon termination, and unless otherwise specified in the applicable client agreement, any

prepaid, unearned fees will be refunded to the client, and any unpaid fees will be due to LFS and/or the other parties to

the agreement. Specific termination provisions vary by TAMP program, and we strongly encourage you to read the

applicable client agreement carefully before entering into any such agreement.

Depending on the program, investment advisory fees may be negotiable and will usually be debited from the client’s

account by the program’s custodian. If the client terminates participation in a program for which fees are charged in

advance, the client will be entitled to a pro rata refund of any prepaid quarterly fees based upon the number of days

remaining in the quarter after termination, unless otherwise specified in the client agreement. The applicable client

agreement contains a more detailed description of the methodology used in calculating account fees and applicable

reimbursements.

Fees charged vary by office and by IAR. Certain IARs provide comparable services for fees that are different from those

charged by other IARs. In all instances, IARs are only permitted to charge fees within a range set by LFS and/or the

program sponsor.

The following is fee information specific to some of the more frequently used programs and services discussed in this

Brochure, however, this description is not binding on the TAMP sponsors or programs, and clients should always refer to

the program-specific disclosures, agreements, and account opening documents for the TAMP program and/or investment

program used by the client.

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SEI Program Fees and Compensation

The advisory fees that IAR may charge on any of the SEI programs and strategies are flexible and are based on the

schedule below established by LFS. In no event may all asset-based fees and charges to the client (including those charged

by LFS, IAR, SEI, or specific managers, but excluding internal expenses of mutual funds) exceed 3% per annum.

Portfolio Value Maximum LFS Advisory Fee Up to $500,000 2.00% Next $500,000 1.75% Next $1 million 1.50% Over $2 million 1.25%

The advisory fee is negotiable and is payable monthly or quarterly in arrears as described in the investment advisory

agreement. All advisory fees will be deducted from the account pursuant to the SEI client agreement unless other

arrangements have been made in writing. All such fees and charges will be clearly noted on client statements issued by

SEI.

LFS and IAR, in connection with the performance of their respective services, shall be entitled to and will share in the

advisory fees payable by the client. LFS may assess an administrative fee of up to 0.05% (5 basis points) on program

assets. In the event such an administrative fee is assessed, it will be separately disclosed in the fee schedule attached to the

client agreement and will not be shared with or paid to the IAR. LFS, in performance of its duties, receives additional

compensation from SEI. Any such compensation is paid from the assets of SEI and i s not charged to the client. This

compensation may vary by the amount of assets under management or other factors and will generally range from 0%

to 0.25% of assets. This presents a conflict of interest for LFS as LFS has an incentive to recommend the SEI program

due to the potential for LFS to receive additional compensation. We mitigate this conflict by disclosing it to you, not

sharing any revenue from such payments with the IAR that recommends transactions or strategies for your account, and

by requiring that there be a review of your account at account-opening and periodically to determine whether it is suitable

and in your best interest in light of your investment objectives, financial circumstances, and other characteristics.

Please carefully review the account opening paperwork provided by SEI, including, but not limited to, the SEI client

agreement, related fee schedules, and SIMC’s Form ADV, Part 2A, for more information about the charges and fees

imposed by SEI, SEI’s affiliates, and specific money managers.

The client agreement may be terminated by any of the parties to the agreement by provision of written notice to the other

parties. Upon termination, any unearned fees will be refunded to the client. Any fees accrued but not yet assessed to the

account will be assessed prior to the termination of the agreement.

Each mutual fund has its own fees and charges, including management fees, which are disclosed in the prospectus of each

fund. In addition, each fund will incur portfolio management costs, primarily in the form of brokerage commissions, as

it buys and sells securities within the fund’s portfolio. These costs are generally described in each fund’s prospectus or

statement of additional information. Although these fees are not liquidated from client accounts and therefore may be

less “visible,” it is important to recognize that these fees represent costs incurred by the client. Detailed information

regarding charges and fees assessed by the SEI Funds is provided in the applicable fund’s prospectus.

The client may make additions to, or withdrawals from, the SEI account upon notice to the IAR and subject to the

terms of the client agreement. If at any time the account assets are less than the minimum account size originally

specified, the client agreement may be subject to termination. The SEI account is designed as a long-term investment

vehicle and asset withdrawals may impair the achievement of the client’s investment objectives.

Clients may pay more or less for services in SEI’s asset management programs than if they purchased similar services

separately. The fees for these programs may be higher or lower than investment advisory fees charged by SEI or LFS to

other clients for similar services. The amount of compensation received by LFS may be more or less than what it would

receive if the client used other programs or paid separately for SEI’s services. Therefore, LFS has a conflict of interest

23

because it has a financial incentive to recommend SEI over other programs or services for which it receives lesser

compensation. We address this conflict by disclosing it to you and by requiring that there be a review of your account at

account-opening and periodically to determine whether it is suitable and in your best interest in light of your investment

objectives, financial circumstances, and other characteristics.

For more information on the SEI program and/or the investment solutions offered by SEI, including minimums and fees,

please refer to the SIMC disclosure brochure:

https://www.lfg.com/wcs-static/pdf/SEI%20Investments%20Management%20Corporation.pdf.

AssetMark Program Fees and Compensation

For AssetMark programs, the client will pay an ongoing investment management fee (“Management Fee”) that varies by

program, which includes a maximum fee of 1.35% payable to LFS. LFS’ portion of the fee is negotiable and varies

among clients.

The Management Fee is calculated and billed quarterly in advance based on the value of the assets in the client’s

account on the last day of the previous calendar quarter. For new accounts, the Management Fee is prorated when the

account is opened for the rest of the quarter. The custodian bills the client’s account for the Management Fee, keeps its

portion for custodial services, and pays the rest of the Management Fee to AssetMark, who then pays LFS and any

portfolio advisers and service providers. LFS will keep part of the Management Fee and pays a portion to the IAR. LFS

also receives additional compensation from AssetMark and its affiliates for its promotional and marketing efforts

for AssetMark’s programs. For addit ional information, please see the Compensation for the Sale of Securities section

of this Brochure found below. LFS also receives cash and non-cash payments from AssetMark and its affiliates for

meetings, training, and support of education and marketing initiatives. This presents a conflict of interest for LFS as LFS

has an incentive to recommend the AssetMark program due to the potential for LFS to receive additional compensation.

We address this conflict by disclosing it to you and by requiring that there be a review of your account at account-opening

and periodically to determine whether it is suitable and in your best interest in light of your investment objectives, financial

circumstances, and other characteristics.

LFS assesses an administrative fee of up to 0.05% (5 basis points) on assets in the AssetMark program. In the event such

an administrative fee is assessed, it will be separately disclosed in the fee schedule attached to the client agreement and will

not be shared with or paid to the IAR.

Please carefully review the account opening paperwork provided by AssetMark, including, but not limited to, the

AssetMark client agreement, related fee schedules, and AssetMark’s Form ADV, Part 2A, for more information about

the charges and fees imposed by AssetMark.

Clients may pay more or less for services in AssetMark’s asset management programs than if they purchased similar

services separately. The fees for these programs may be higher or lower than investment advisory fees charged by

AssetMark or LFS to other clients for similar services. The amount of compensation received by LFS may be more or less

than what it would receive if the client used other programs or paid separately for AssetMark’s services. Therefore, LFS

has a conflict of interest because it has a financial incentive to recommend AssetMark over other programs or services for

which it receives lesser compensation. We address this conflict by disclosing it to you and by requiring that there be a

review of your account at account-opening and periodically to determine whether it is suitable and in your best interest in

light of your investment objectives, financial circumstances, and other characteristics.

For more information on the AssetMark program and/or the investment solutions offered by AssetMark, including

minimums and fees, please refer to the AssetMark disclosure brochure:

https://www.lfg.com/wcs-static/pdf/AssetMark,%20Inc..pdf.

Morningstar Program Fees and Compensation

Fees for the Morningstar® Managed Portfolios Program are paid quarterly in arrears based on the average account value

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during the quarter. MIS will be paid for its investment advisory services as a percentage of assets. MIS will delegate

certain services to LFS, such as assisting each client in completing a questionnaire and other account opening forms,

determining suitability, contacting the client at least annually to identify any changes in their financial situation, and

acting as liaison between MIS and the client. For these services, LFS will receive a portion of the annual fee paid by the

client. LFS’ portion of the fee will not be more than 1.10% annually. Clearing and custody charges associated with the

account will be disclosed to the client by the applicable broker-dealer.

Please carefully review the account opening paperwork provided by MIS, including, but not limited to, the MIS client

agreement, related fee schedules, and MIS’s Form ADV, Part 2A, as well as all applicable custodial paperwork, for more

information about the charges and fees imposed by MIS and the applicable custodian and clearing firm.

LFS also receives additional compensation from MIS for its promotional and marketing efforts for MIS’s programs. For

additional information, please see the “Compensation for the Sale of Securities” section of this Brochure found below. LFS

also receives cash and non-cash payments from MIS for meetings, training, and support of education and marketing

initiatives. This presents a conflict of interest for LFS as LFS has an incentive to recommend the MIS program due to the

potential for LFS to receive additional compensation. We address this conflict by disclosing it to you and by requiring that

there be a review of your account at account-opening and periodically to determine whether it is suitable an in your best

interest in light of your investment objectives, financial circumstances, and other characteristics. Clients may pay more or less for services in MIS’s asset management programs than if you purchased similar services

separately. The fees for these programs may be higher or lower than investment advisory fees charged by MIS or LFS to

other clients for similar services. The amount of compensation received by LFS may be more or less than what it would

receive if the client used other programs or paid separately for MIS’s services. Therefore, LFS has a conflict of interest

because it has a financial incentive to recommend MIS over other programs or services for which it receives lesser

compensation. We address this conflict by disclosing it to you and by requiring that there be a review of your account at

account-opening and periodically to determine whether it is suitable and in your best interest in light of your investment

objectives, financial circumstances, and other characteristics. For more information on the Morningstar® Managed Portfolios Program and/or the investment solutions offered by MIS,

including minimums and fees, please refer to the MIS disclosure brochure:

https://www.lfg.com/wcs-static/pdf/Morningstar%20Investment%20Services,%20Inc..pdf.

Solicitor Program Fees and Compensation

As part of the solicitation services LFS previously provided, LFS and the IARs receive referral fees for referring clients

to TAMPs and other investment advisers, which are generally referred to as “Solicitor Fees.” In most cases the Solicitor

Fees are calculated as a percentage of the client assets that the TAMP or other investment adviser manages; however,

there may be instances where the Solicitor Fees are determined in some other fashion. LFS’ Solicitor Fee usually is

negotiable, and typically ranges between 25% and 100% of the total investment advisory fee paid by the client. The

Solicitor Fees are disclosed to clients and prospective clients in accordance with Rule 206(4)-3 under the Advisers

Act, which governs the payment of fees for client referrals.

LFS stopped offering solicitor programs to new accounts as of June 9, 2017; however, LFS receives Solicitor Fees for

accounts that were referred under solicitation arrangements prior to June 9, 2017.

Financial Planning Compensation

Planning fees are charged according to various factors such as the income and net worth of the client and the complexity

of the client’s assets. The fee may depend on whether the service is made available by an employer as an employee

benefit and/or whether the fee is for a new contract or the renewal of an existing contract. All planning fees are based on

the specific planning services provided to the client and the complexity of the client’s financial situation and goals.

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Financial Planning Fees

As compensation to LFS for rendering financial analysis and planning services, fees charged will be determined by

the IAR and client based on several factors, including the complexity of the planning and consulting engagement, and

shall not exceed $50,000 unless requested by the client and expressly authorized in writing by an officer of LFS.

Clients shall have the option to pay a portion of the fee at the time the service agreement is signed, and the remainder

of the fee when the financial analysis and plan is delivered. The client may request an update to their financial analysis

and plan by submitting a written request to LFS or their IAR. Any such update will be provided on substantially the

same terms as the initial financial analysis and plan, subject to a separate fee negotiated between the client and the IAR.

The fee for an update is negotiable and shall not exceed the fee charged for the initial financial analysis and plan. This fee

will be shared between LFS and the IAR for their services.

LFS may pay a portion of the total fee paid by the client to Lincoln Financial Advisors Corporation (“LFA”), an affiliated

investment adviser, for certain services performed by LFA’s financial planning department in the development of the

client’s financial plan. Any services provided by LFA pursuant to this arrangement will be provided to LFS, and not to

the client.

LFS and the IARs may also provide financial analysis and/or a financial plan to a client without charging a separate fee

for these services. If no separate fee is charged, a written service agreement may or may not be used to provide these

services. If the client elects to implement any transactions in securities or other financial products as a result of the

financial analysis or financial plan and elects to use LFS and/or an LFS financial professional for implementation, LFS

and/or the LFS financial professional will receive commissions, fees, and/or other compensation in the process of

implementation.

Client Consultation Fees

As compensation to LFS for rendering the above described services, the client will be charged either an hourly fee not to

exceed $300 or a fee per visit not to exceed $500. LFS does not accept retainer fees for future services to be determined.

This fee is negotiable and will vary depending on the depth and complexity of the services provided and will be shared

between LFS and the IAR. The fee will be determined and billed when the client signs the contract or as otherwise

agreed to between the client and the IAR.

Seminar Fees

Seminar fees are charged either as a flat fee for a group of attendees, or a flat amount per attendee. Fees are usually paid

up front. The seminar agreement is terminated automatically upon the earlier of the completion of the seminar and the

payment of the fee to LFS, or the cancellation of the seminar and the return of the fee, if one has been paid, to the client.

Retirement Plan Consulting Services

Fees for the Retirement Plan Services are negotiable. The Sponsor may be charged a fee based on a percentage of Plan

assets, an hourly rate or a flat dollar amount. The Sponsor may decide whether to pay the fees directly or may authorize

the Plan’s recordkeeper or custodian to pay LFS from Plan assets. If fees are to be charged on an ongoing basis,

they will be billed monthly or quarterly in arrears. If the fee is not hourly, the initial fee will be prorated based upon the

number of days remaining in the initial quarterly period from the date of execution or effective date of the Agreement,

unless other arrangements are agreed to by the Sponsor. If the fee is based on a percentage of Plan assets, the initial fee

will be based upon the market value of the Plan assets at the close of business on the last business day of the initial

quarterly period, based on the average daily balance of Plan assets, or as otherwise calculated by the recordkeeper used

by the Plan.

Thereafter, the quarterly portion of any annual asset-based fees will be based upon the market value of the Plan assets at

the close of business on the last business day of the previous calendar month or quarter (without adjustment for anticipated

withdrawals by Plan participants or beneficiaries or other anticipated or scheduled transfers or distributions of assets),

based on the average daily balance of Plan assets, or as otherwise calculated by the recordkeeper. If the Agreement

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is terminated prior to the end of a quarter, LFS will be entitled to a fee, prorated for the number of days in the period prior

to the effective date of termination, or as otherwise calculated by the recordkeeper. Sponsors receiving Retirement Plan

Services may pay more or less than a client might otherwise pay if purchasing the Retirement Plan Services separately

or through another service provider. There are several factors that determine whether the costs would be more or less,

including, but not limited to, the size of the Plan, the specific investments made by the Plan, the number of locations

of participants, the Retirement Plan Services offered by another service provider, and the actual costs of Retirement Plan

Services purchased elsewhere. In light of the specific Retirement Plan Services offered by LFS, the fees charged may be

more or less than those of other similar service providers. All fees paid to LFS for Retirement Plan Services are separate

and distinct from the fees and expenses charged by mutual funds, ETFs, and other investment vehicles to their shareholders.

Those fees and expenses are described in each investment’s prospectus, and will generally include a management fee,

other expenses, and possible distribution fees. If the investment also imposes sales charges, a client may pay an

initial or deferred sales charge. The Retirement Plan Services provided by LFS are designed to, among other things, assist

the client in determining which investment managers are most appropriate to each client’s financial condition and

objectives and to provide other administrative assistance as selected by the client. Accordingly, the client should review

both the fees charged by the funds, the investment manager, the Plan’s other service providers and the fees charged by LFS

to fully understand the total amount of fees to be paid by the client and to evaluate the Retirement Plan Services being

provided.

Other Client Fees and Expenses

In addition to the program fees and transaction charges noted previously, based upon the investments selected, clients may incur

certain charges imposed by third parties in connection with the investments made through program accounts. These include,

but are not limited to: mutual fund or money market 12b-1 and sub-transfer agency fees, mutual fund networking fees, mutual

fund or money market management fees and administrative expenses, certain deferred sales charges on previously purchased

mutual fund shares transferred into a program account, other transaction charges and service fees, and other charges permitted

or required by law. LFS receives a portion of these fees and, as such, LFS has a conflict of interest as it has an incentive to

recommend products and strategies that provide LFS higher compensation. We mitigate this conflict by disclosing it to you,

crediting back any 12b-1 fees LFS would have otherwise received as the introducing broker-dealer of record to the client

account from which it was generated, not sharing any of these revenues with the Adviser that recommends transactions or

strategies for your account, and by requiring that there be a review of your account at account-opening and periodically to

determine whether it is suitable and in your best interest in light of your investment objectives, financial circumstances, and

other characteristics. However, it is important to note that LFS is not typically the introducing broker-dealer of record on client

accounts invested in TAMP programs and therefore LFS is not receiving, or crediting, 12b-1 fees as mentioned above related

to client accounts in TAMP programs. Further information regarding costs and fees charged by a mutual fund, ETF, variable

annuity or similar investment vehicle is available in the applicable prospectus. For complete fee details, including account fee

schedules and a list of transaction charges, please see your client agreement and the supporting documentation that you receive

in connection with the program, including prospectuses for mutual funds and other investment vehicles.

In one of the Pacific programs called the Managed Strategists Program, client portfolios are invested solely in the RiskPro

Funds, a group of mutual funds managed by an affiliate of Pacific. In this program, LFS receives annual fees of 0.75% for

assets held in the program. This fee is offset in its entirety by the receipt by LFS of an annualized total of 0.75% of revenue

from Pacific and the RiskPro Funds. The revenues paid to LFS are as follows: 0.25% annualized fee paid by the RiskPro

Funds as a 12b-1 fee; 0.25% annualized fee paid by the RiskPro Funds as a shareholder services fee; and 0.25% annualized fee

paid by Pacific from its own resources. Since the fees payable to LFS from the Managed Strategists Program are offset in their

entirety by these other sources of revenue, no fee for LFS is liquidated from the client’s account in this program. The fees

payable to LFS and the offsetting arrangement described above is described in more detail in Pacific’s Form ADV, Part 2A,

and in the investment management agreement and disclosure statement signed by the client specific to the Managed Strategists

Program.

A client could invest in mutual funds and other investment products directly, without the services of LFS or an Adviser. In that

case, the client would not receive the services provided by LFS or the Adviser, which are designed, among other things, to

assist the client in determining which mutual funds or other investments are most appropriate given each client’s financial

condition and objectives. Accordingly, the client should review both the fees charged by the mutual funds and other investment

27

products and the fees charged and services provided by LFS and the Adviser to understand the total amount of fees to be paid

by the client and thereby evaluate the services being provided.

In addition to program fees, a client also may be subject to other fees and expenses, if applicable, including dealer mark-

ups, costs associated with the purchase and sale of certain mutual funds, odd-lot differentials, exchange or auction fees,

transfer taxes, costs for transactions executed other than by the custodian, electronic fund and wire transfers, SEC fees,

other charges mandated by law, and any custodial fees, record keeping and reporting fees charged to IRA and other

retirement plan accounts.

Transaction fees, mark-ups or mark-downs, and other charges to cover execution, brokerage and custodial costs may apply

to certain mutual funds, stocks, bonds, AIs, and other securities purchased in certain programs. These additional

transaction fees are further detailed and described in your investment advisory account opening application and/or your

advisory services agreement.

Margin and Securities Backed Line of Credit

To the extent the TAMP sponsor offers the ability to take a margin loan or a securities backed line of credit (“SBLOC”),

LFS and your IAR have an incentive to recommend that you use a margin loan and/or an SBLOC for liquidity purposes

rather than liquidating your holdings or using other sources of liquidity. LFS and your IAR will benefit from your margin

loan or SBLOC because you don’t have to liquidate assets in your account to pay for things with cash, which would diminish

the assets held in the account and the potential fees that could be earned by LFS and your IAR from holding or engaging

in future transactions with those assets. For example, by encouraging investors to take out a margin loan or an SBLOC to

fund some purchase or financial need rather than liquidate securities, LFS and your IAR will continue to earn fees on the

full account value. However, your IAR receives no other compensation, fees, or incentives related to your decision to use

a margin loan or an SBLOC or maintain a loan balance through one of the TAMP programs.

Step-Out Trading

Investment managers who have the discretion to trade away from the broker-dealer associated with the investment advisory

program or wrap fee program may do so for a variety of reasons consistent with obtaining an optimal combination of price

and service for the client. In some cases, the investment manager may purchase certain fixed-income securities directly from

the broker or dealer selling the securities in order to achieve a more favorable price, with a lower mark-up or mark-down,

or because the particular security is not available through the broker-dealer associated with the investment advisory program

or wrap fee program.

In other instances, the investment manager may “step-out” trades for investment advisory or wrap program clients in a

“block” with the manager’s other clients and execute that block with another broker-dealer to buy or sell a security in a large

quantity and/or at an attractive price, to obtain specialized services offered by that broker-dealer, or for other reasons listed

in such investment manager’s Form ADV disclosure brochure. When including investment advisory program or wrap

program clients in such a block, depending on the arrangement agreed to with the third-party manager, the executing broker-

dealer may elect to not impose any commission or separate charge for the transaction, or may add a separate commission

on the transaction that will be borne by the investment advisory program or wrap program client that is in addition to the

program fee paid by the client. The additional commission may appear as a separate commission on the client’s custodial

statement or may be embedded in the listed price of the security on the client’s statement. In this situation, the client will

incur trading costs in addition to the program fee described above. Neither LFS nor the IAR will receive any additional

compensation in connection with costs incurred due to step-out trading.

When step-out trading occurs through broker-dealers whose commissions or other fees are not assumed within the program

fee, the client incurs additional commissions or fees in addition to any program fees. Any additional trading costs may

negatively impact investment performance. However, the decision to execute a step-out trade may allow the manager to

achieve a better price execution.

In some instances, stepped-out trades are executed by the other firm without any additional commission or markup or

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markdown, but in other instances, the executing firm may impose a commission or a markup or markdown on the trade.

If trades are placed with a firm that imposes a commission or equivalent fee on the trade, including a commission that may

be embedded in the price of the security, the client will incur trading costs in addition to the program fee the client pays

and described above. Please see “Item 12. Brokerage Practices” in this Brochure below for further information regarding

these practices.

Further information regarding third-party advisers utilizing step-out trades and a general description of the additional

costs related to step-out trades can be found on our website at www.lfg.com/public/individual/adv.

Where LFS is the introducing broker-dealer on program accounts, LFS will act as a broker for transactions in program

accounts and will assess a transaction charge for certain transactions unless transaction costs are included in the asset-based

fee. The transaction-based charges assessed by LFS are not shared with the IAR providing services to the program accounts.

The receipt of transaction charges by LFS presents a conflict of interest for LFS because clients are charged more

when there are more trades in their accounts, and LFS therefore has an incentive to encourage you to trade often .

We mitigate this conflict by disclosing it to you, disclosing to you the amount of commission-trading cost there will be for

the products or securities being invested in, not sharing any transaction fee revenue with the IAR that recommends

transactions or strategies for your account, and by requiring that there be a review of your account at account-opening

and periodically to d e t e rmi n e wh e t h e r it is suitable and in your best interest in light of your investment objectives,

financial circumstances, and other characteristics. LFS, as the broker-dealer on such program accounts, also has a duty

to ensure such transaction charges are reasonable in light of its best execution responsibilities. LFS utilizes National

Financial Services LLC (“NFS”) for several services, including clearance and execution services, through a fully-disclosed

clearing agreement. The transaction charges assessed by LFS and disclosed in the Fee and Commission Schedule you

receive as part of your account opening paperwork are generally higher than the fees that LFS pays to NFS for clearance

and execution of transactions. When acting as the introducing broker-dealer of record on your account, LFS is responsible

for and performs a number of broker-dealer functions and services with respect to your account and any securities

transactions. LFS’ responsibilities include, but are not limited to, collecting, verifying and maintaining documentation about

you and your account, approval and acceptance of your account, reviewing and supervising activities, including trading

activities, within your account, reviewing and either accepting or rejecting any transactions within the account, transmission

of all orders with respect to the account, supervision of all orders and accounts, including maintaining compliance with

fiduciary standards and suitability requirements, as applicable, and ensuring that any mutual fund orders are in compliance

with the terms of the applicable prospectus. LFS maintains substantial operational, compliance and technology resources

in support of its broker-dealer operations necessary to provide these and other services in connection with your account

and any transactions effected in your account. However, it is important to note that LFS is not typically the introducing

broker-dealer of record on client accounts invested in TAMP programs and therefore LFS is not assessing or receiving

transaction-based charges as mentioned above related to client accounts in TAMP programs.

Mutual Fund Categories and Share Classes

The mutual fund share classes that pay 12b-1 fees typically have higher internal expenses, but in many cases these mutual

fund share classes do not incur transaction fee charges (or commissions) when executing a trade at the clearing firm.

Other mutual fund share classes that may have lower internal expenses and do not pay 12b-1 fees may be available;

however, those share classes may incur transaction fees (or commissions) with any purchase or sale. Each share class has

eligibility standards, including potentially a minimum investment requirement to purchase such share classes. Clients

should not assume that they are always invested in the share class with the lowest internal expenses or costs. Please contact

your IAR for more information about share class eligibility and transaction costs, and please review the applicable

mutual fund prospectus for further information related to the fund’s expenses. As mentioned above, LFS does not retain

12b-1 fees paid by mutual funds on investment advisory accounts on which it is the broker-dealer of record and LFS credits

the amounts that it would otherwise receive back to the client account for which the 12b-1 fee was generated. However, it

is important to note that LFS is not typically the broker-dealer of record on client accounts invested in TAMP programs

and therefore LFS is not receiving, or crediting, 12b-1 fees as mentioned above related to client accounts in TAMP

programs.

Many mutual funds offer multiple share classes available for investment based upon certain eligibility and/or purchase

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requirements. For instance, in addition to the more commonly offered retail share classes (typically, Class A (including

load-waived A shares), B and C shares), some mutual funds offer institutional share classes or other share classes that

are specifically designed for purchase in accounts enrolled in fee-based investment advisory programs. Institutional

share classes or classes of shares designed for purchase in investment advisory programs usually have lower expense

ratios than other shares classes. However, these share classes may also have higher transaction costs and may have

minimum purchase criteria that limit availability to larger transactions. Clients should not assume that their assets

will be invested in the share class with the lowest possible expense ratio. Your IAR may recommend, select, or

continue to hold a fund share class that charges higher internal expenses than other available share classes for

the same fund.

The TAMP program sponsor’s or investment manager’s assessment, recommendation or investment of your client account

assets into a particular mutual fund or share class may be based on a range of different considerations, including, but not

limited to: whether transaction charges are applied to the purchase or sale of t h e p a r t i c u l a r mutual fund or share

class; the asset- based advisory fee charged to the client; the overall cost structure of the advisory program; operational

considerations associated with accessing or offering particular share classes (including the presence of selling agreements

with the mutual fund sponsors and the ability to access particular share classes through the custodian); and share class

eligibility requirements. The factors considered, and the weighting of the importance of each of these factors, will vary

among the TAMP program sponsors and the investment managers. The transaction costs and advisory program cost

structure is determined by the TAMP program sponsors, custodian and LFS, respectively, and is determined based on

factors such as the availability of cost sharing, distribution fees, shareholder servicing fees or other compensation associated

with offering a particular class of shares.

In selecting or recommending particular mutual fund share classes, TAMP program sponsors and investment managers

may (but are not required to) consider the overall profitability of the account or client relationship, including the

compensation available to the TAMP program sponsor and/or investment manager and the expenses associated with

providing ongoing advice and services to the client. Accordingly, the advisory fees that are charged on an account

or in the aggregate at the client relationship level may take into consideration the mutual fund share classes in which clients

are invested. Clients that are invested in institutional share classes may have higher advisory fees and may be assessed

higher transaction charges for the purchase and sale of mutual funds. Similarly, clients that are invested in retail share

classes may be charged lower advisory fees, have lower transaction charges, and may receive 12b-1 credits or other fee

offsets to reduce the impact of being invested in a share class with higher internal expenses. Clients that prefer or request

that transaction charges be minimized or avoided may be invested in share classes with higher internal expenses but lower

transaction-based charges. Please contact your IAR and/or the TAMP sponsor for more information about share class

eligibility and transaction costs associated with the various TAMP programs offered by LFS.

Custodian and Clearing Firm Relationships

LFS has a financial incentive to select or recommend a particular custodian, and to increase or maintain the amount of

client assets held with that custodian, based on the compensation that the custodian provides to LFS and its affiliates. For

example, under the agreement between LFS and its clearing firm, LFS is entitled to receive annual business development

credits during the term of the clearing relationship, has received non-recurring business development credits, and would

be required to make certain payments to the clearing firm if the clearing relationship were terminated for specified reasons

or if LFS failed to maintain specified levels of client assets with the clearing firm. Additionally, LFS is entitled to receive

reimbursements for account transfer costs associated with client account transfers into the custodian and clearing firm that

represent new assets for the custodian and clearing firm. These account transfer cost reimbursements may not be offered

or available to all new clients transferring their assets to the custodian and clearing firm. This creates a conflict of interest

for the IAR because he or she could select which clients receive the transfer cost reimbursement. We attempt to mitigate

this conflict by disclosing it to you and attempting to ensure that any transfer cost reimbursements provided to a client

account is directly proportional to the actual costs incurred by the client in transferring his or her account to the

custodian and clearing firm. This further ensures that the IAR does not benefit himself or herself at the expense of the

client in terms of these transfer cost reimbursements that are made available to clients. However, it is important to note that

LFS does not have the ability to select or recommend a particular custodian or clearing firm for client accounts invested in

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TAMP programs and therefore LFS is not receiving any of the compensation or business development credits mentioned

above as it relates to client accounts in TAMP programs.

Through its clearing relationship with NFS, LFS receives certain revenue related to margin loans, free credit balances,

and debt balances maintained by client accounts in addition to a portion of the Automated Customer Account Transfer

Services fee charged by NFS and custodial fees charged to qualified plans and IRAs. However, none of this revenue

received by LFS is related to particular assets held by a client (such as a particular mutual fund product, mutual fund

share class, or cash sweep vehicle recommended or selected) in Program Accounts, or related to transactions or

activity specific to Program Accounts or in its role as the investment adviser on such accounts. The receipt by LFS of

these types of revenue from the clearing and custodial firm arrangements will support and defray the costs LFS has

related to the ongoing operational and administrative maintenance of client accounts in its role as broker-dealer or the

introducing broker-dealer on such client accounts. The payment of this revenue to LFS can be a factor in determining

and selecting a particular custodian that we would otherwise select and utilize, such as NFS. We mitigate this conflict

by disclosing it to you, ensuring the revenue LFS receives is not shared with the IARs providing investment advisory

services and investment recommendations to you and your account, and by requiring that there be a review of your

account at account-opening and periodically to determine whether it is suitable and in your best interest in light of

your investment objectives, financial circumstances, and other characteristics. However, it is important to note that LFS

does not have the ability to select or recommend a particular custodian or clearing firm for client accounts invested in

TAMP programs and therefore LFS is not receiving any of the revenue mentioned above as it relates to client accounts in

TAMP programs.

LFS has arrangements with custodians of advisory programs under which LFS provides the custodians with certain

services, which vary by custodian. These services generally include, but are not limited to, (i) clerical assistance in

completing account opening paperwork and opening client accounts, (ii) clerical assistance in maintaining client accounts,

processing asset transfers and money movement, (iii) reconciling and assisting in updating client account information, (iv)

clerical assistance in connection with client questions and account information research, (v) helping clients with using

brokerage and account services such as periodic investment programs and check writing services, (vi) notifying custodian

of certain customer complaints, and (vii) monitoring activity in client accounts.

Compensation for the Sale of Securities

Clients have the option to purchase investment products recommended by LFS and the IARs through other brokers or

agents that are not affiliated with LFS. Generally speaking, and not specific to the advisory programs described in this

Brochure, commissions and other compensation for the sale of investment products provide the primary compensation for

LFS and many of the IARs. LFS generally does not reduce its advisory fees to offset any applicable commissions or

transaction costs. Should a client choose to implement any of the suggestions made in the recommended financial plan

through LFS, we will be acting in our capacity as broker-dealer, not as an investment adviser (unless otherwise agreed in

writing), in executing transactions for your account.

If any of the Lincoln Financial Group companies or an unaffiliated company acts as an issuer, underwriter, distributor

or adviser with respect to a product or program sold to clients, LFS earns compensation from such sale. In addition,

these products and programs contain charges and commissions payable to the IARs involved. LFS and the IARs may also

receive incentive awards for the recommendation of investment products.

Depending on which product and/or service you purchase, you will receive materials that disclose important information,

such as product prospectuses, client agreements, applications, and disclosure brochures. You should read and evaluate this

information carefully and contact your IAR with any questions.

LFS has agreements with certain mutual fund companies, insurance companies, broker-dealers, investment advisers, and

sponsors and custodians of advisory programs in which they provide compensation and expense reimbursements to LFS

in support of the training, education and marketing support required of these products. In addition, LFS may impose certain

administrative costs in connection with these programs. The method, timing and amount of payments vary by program

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and sponsor, and typically will be paid using one or more methodologies, such as: a direct reimbursement of certain

expenses; payment of a specified dollar amount to participate in certain conferences; payment of a fee or service charge

for a transaction; payment of a fee based on sales volume; or a payment of a percentage of assets under management.

Depending on the methodology, these payments may include fees in connection with securities transactions, transaction or

account-based administrative or service charges, and may include payments of 12b-1 fees or other asset-based fees

from money market funds and other mutual funds. Payments calculated as a percentage of assets under management range

from 0% to 0.25%. Administrative charges, if applicable, range from 0.05% to 0.25% of assets under management. LFS

also provides a variety of distribution and marketing support services to mutual fund companies and other product sponsors.

The services provided to companies participating in these arrangements include, but are not limited to: opportunities to

provide training and education regarding their funds and products, advisors and other firm personnel through office visits,

educational events or conferences; review, approval and distribution of mutual fund and other marketing materials to IARs

and existing and prospective LFS clients; business planning and other communication and support from home office, field,

sales, and specialist personnel; opportunities to provide content for internal communications; and sales related reports and

other information and participation in sales campaigns. While the terms of these arrangements vary, each fund family or

o ther product sponsor may pay up to 0.25% of the gross amount of each sale, and/or up to 0.20% annually of the

assets of the fund family or product sponsor held by LFS clients in order to support and share in the distribution and

marketing costs incurred by LFS. For example, for a $10,000 transaction with a participating fund family or other product

sponsor, LFS may receive up to a one-time $25 payment, and/or a $20 annual payment for the period during which

the assets remain at the fund family or product sponsor. Certain participating fund families and other product sponsors also

make additional payments to LFS for attendance at various educational meetings hosted by LFS throughout the year.

In addition to the mutual fund families and other product sponsors that have formal distribution and marketing support

agreements, other mutual fund families and product sponsors make flat dollar payments to LFS from time to time. These

payments are not made as part of any formalized sales-based or asset-based agreement, but rather for specific activities

including, but not limited to, exhibit booth space or presentation opportunities at LFS meetings.

Certain sponsors of these programs also directly pay for certain educational and training costs of IARs and send their

employees to meetings to provide education and training on these programs. LFS has a conflict of interest to recommend

products, services, and strategies on which it receives higher compensation. We mitigate this conflict by disclosing it to

you, not sharing any of these revenues with the IAR that recommends transactions or strategies for your account, and by

requiring that there be a review of your account at account-opening and periodically to determine whether it is suitable and

in your best interest in light of your investment objectives, financial circumstances, and other characteristics. The advisory

services sponsors and other companies that provide payments to LFS as described above can be found on LFS’ website at

www.lfsecurities.com under My accounts—Disclosures.

LFS, the IARs, and clients also receive the benefit of certain services provided by program sponsors and custodians. These

services may include performance reporting, statement creation and delivery, technology systems, including online access

to account information, fee liquidation, notification and payment services, marketing material and other services related

to the management of investment advisory accounts. Some of these services may involve additional charges to LFS, the

IARs, or to clients, while others are packaged and available as part of an investment advisory program without

itemization of the cost of each product or service.

Further, LFS has relationships with both affiliated and non-affiliated companies that provide additional revenue and

marketing support to LFS as well as education and training to IARs for the sale of various mutual fund, annuity, life

insurance and alternative investment products. This revenue and marketing support received by LFS is not paid to

or shared with any IAR. For current information regarding specific revenue and marketing support arrangements, including

a list of product sponsors, please go to LFS’ website at www.lfsecurities.com under My accounts—Disclosures.

IAR Compensation

Some IARs receive additional compensation and/or incentive awards for reaching certain levels of assets under

management in the investment advisory programs or generating a certain amount of revenue (in fees, commissions, or a

combination of both) within a certain time period. The client will not be charged any additional fees due to these

circumstances. However, the receipt of additional compensation presents a conflict of interest that may affect the judgment

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of the IAR. We mitigate this conflict by disclosing it to you and by requiring that there be a review of your account at

account-opening and periodically to determine whether it is suitable and in your best interest in light of your investment

objectives, financial circumstances, and other characteristics.

Most IARs are registered representatives of LFS in its capacity as a broker-dealer, and generally are licensed agents

of LNL. In most cases, the IAR can recommend products that are managed and/or sold by Lincoln Financial Group

companies provided that the recommendations are suitable given the client’s investment objectives and other pertinent

factors. When such recommendations are made, the IAR receives compensation on these product recommendations and

sales. Lincoln Financial Group companies will profit from any sales of Lincoln Financial Group products to clients of LFS.

IARs may be compensated by LFS and/or the product manufacturer via commissions, asset-based fees, and/or other

compensation which is built into the costs and charges of the product. This presents a conflict of interest as LFS and the

IARs have an incentive to recommend investment products based on the compensation received, rather than on a client’s

needs. We mitigate this conflict by disclosing it to you and by requiring that there be a review of your account at

account-opening and periodically to determine whether it is suitable and in your best interest in light of your investment

objectives, financial circumstances, and other characteristics.

In some cases, IARs receive more compensation when placing Lincoln Financial Group manufactured products and qualify

for additional compensation based on the volume of those sales over time. IARs are also eligible for additional

compensation and/or other incentives based on factors such as sales volume of certain Lincoln Financial Group products,

the length of time that clients keep assets in the products, and/or the profitability of the products. IARs may also receive

compensation based on the sales of Lincoln Financial Group products by other representatives. Some IARs participate in

benefit programs whose costs are partially reimbursed by Lincoln Financial Group affiliates, and/or which are based on

sales volume of Lincoln Financial Group products. LFS-affiliated companies will also benefit financially from the sale of

Lincoln Financial Group life insurance, annuity, mutual fund and asset management products offered by IARs. These

instances present conflicts of interest as these situations create a financial incentive for LFS and IARs to recommend

products for which they or their affiliates receive higher compensation. We mitigate this conflict by disclosing it to you

and by requiring that there be a review of your account at account-opening and periodically to determine whether it is

suitable and in your best interest in light of your investment objectives, financial circumstances, and other characteristics.

Because of the way products are priced and marketed, in certain circumstances, IARs may receive higher compensation

for the sale of products offered by companies not affiliated with Lincoln Financial Group.

Some more experienced IARs who moved their practices to LFS have received loans based on future sales of products and

services offered by LFS, including both Lincoln Financial Group and non-Lincoln Financial Group products and services.

In the past, some loans were offered based on Lincoln Financial Group products alone. Depending on the arrangement

between LFS and the IAR, the repayment of certain of these loans may be fully or partly waived based on reaching

certain sales levels or revenues generated by the IAR or the IAR’s time spent affiliated with LFS or may be funded by

additional compensation for these sales. This arrangement creates a conflict of interest for the IAR in that he or she

has an additional financial incentive to achieve specified levels of sales or revenue generation, which could impact the

recommendations made to customers. In mid-2017, LFS revised the production-based forgivable loan program to

implement new required controls and policies. These controls and policies attempt to ensure that the loan amount provided

to an IAR is not disproportionate to the IAR’s overall production and compensation amounts earned historically.

Additionally, the amount that may be forgiven in any one year of the term of the loan is capped unless an exception is

granted. This structure and approach attempt to avoid unduly influencing an IAR to have significant disproportionate

production or compensation earned in any given year to attempt to receive a large windfall in having large outstanding loan

amounts forgiven

The conflicts of interest arising from the IAR compensation arrangements described above are mitigated by the fact that

LFS, LNL and their affiliated companies have suitability requirements and fiduciary obligations in certain circumstances,

such as when LFS and the IARs are acting in an investment advisory capacity, as well as regulatory and compliance rules

and procedures which must be followed. In addition, LFS maintains a supervisory system that includes conducting

periodic supervisory and compliance inspections and audits. In most instances, IARs may only recommend products

offered through LFS where LFS has a selling agreement with the product sponsors. This limitation may not apply in all

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cases to certain “no-load” mutual funds, ETFs, other securities and non-registered insurance and annuity products.

Item 6: Performance-Based Fees and Side-By-Side Management

LFS and the IARs do not charge fees based on a share of capital gains or capital appreciation of client assets.

Item 7: Types of Clients

LFS generally provides investment advice to individuals, high net worth individuals, pension and profit- sharing plans,

charitable organizations, corporations and other businesses, and state or municipal government entities.

Requirements for opening and maintaining an account, such as minimum account size, are listed above in the description

for each advisory program or service, if applicable.

Item 8: Methods of Analysis, Investment Strategies and Risk of Loss

Asset Management Programs

IARs perform analyses for asset management programs, which are provided to clients. These analyses rely on research

reports and information provided by third parties who are contracted to provide such information. IARs consult with their

clients to develop an investment strategy for the client. The methods of analysis and investment strategies will vary based

upon the individual IAR providing the advice. Where applicable, IARs may use a holistic approach in managing multiple

accounts to a client’s objectives and risk tolerance and for tax efficiency. LFS has tools that may be utilized in this

regard or IARs may use their own expertise in making recommendations to address those concerns.

Each IAR may develop specific investment strategies that may include investing in multiple or single asset classes, model

portfolios or some other distinct investment strategy. Other IARs may take a more customized approach to management

of client accounts. Each IAR is primarily responsible for making and implementing recommendations for investment

managers, strategies, and in some cases, security selection, for a client account within the investment guidelines of the

particular program through which the client invests. At LFS’ discretion, certain IARs have greater latitude in selecting

and recommending securities and diversification. Therefore, the availability of investment strategies and securities and the

applicability of investment limitations vary depending on a client’s particular IAR.

LFS researches, selects and reviews on an ongoing basis the third-party advisory programs that are offered through LFS.

LFS may use information provided by the third-party advisory program sponsor and may also use independent, third-

party data sources when evaluating a third-party advisory program. As with any investment strategy, asset allocation,

model or investment portfolio, past performance is no guarantee of future performance. In addition, forecasts of future

performance of financial markets may prove to be incorrect. Diversification helps you spread risk throughout your

investment portfolio. Different asset classes have different risk and potential return profiles and they perform differently

in different market conditions. Diversification alone will not guarantee a profit or protect against a loss. LFS does not

independently audit the historical performance published by third-party investment managers. Clients are strongly

encouraged to carefully review the third-party investment manager’s disclosures regarding prior performance to determine

the relevance of the prior performance to the client’s account, and whether the prior performance includes any hypothetical

or back-tested performance information.

For all asset management programs used by LFS, the specific security analysis methods, sources of information and

investment strategies depend upon and are determined by the applicable third-party asset managers. For additional

information regarding the methods of analysis or investment strategies of particular third-party managers, please refer to

the Form ADV, Part 2A for the particular manager.

Investments made and the actions taken for client accounts will be subject to various market, liquidity, currency, economic

34

and political risks, among others, and will not necessarily be profitable. Investing in securities involves risk of loss that

clients should be prepared to bear. Clients should understand that all investments involve risk, that investment

performance can never be predicted or guaranteed and that the value of client accounts will fluctuate due to market

conditions and other factors. Clients are assuming the risks involved with investing in securities and could lose all or

a portion of the amount held in their account. In addition, as noted above, certain IARs have greater latitude in selecting

securities and diversification for a client’s account. As such, the performance of accounts managed by different IARs may

vary greatly. Past performance is not a guarantee of future results.

Financial Planning Services

LFS provides its financial planning services using both fundamental and technical approaches to financial planning. In the

financial planning process, IARs will assist clients, through the use of approved questionnaires and software, in identifying

their financial objectives. As part of this process, clients are responsible for providing LFS with information that is

accurate and complete, and any failure to do so is likely to affect the analysis and recommendations contained in the

financial plan prepared for a particular client. IARs will recommend asset allocation strategies made up of different

categories of financial assets in order to address specific client-identified economic and tax concerns. IARs have the latitude

to determine how best to develop the financial plans that they present to clients. As a result, the composition of financial

plans and the underlying recommendations offered by different IARs may vary greatly. It is the client’s responsibility to

determine if, and how, the suggestions contained in LFS’ recommended financial plan should be implemented or otherwise

followed. Clients should carefully consider all relevant factors in making these decisions, and clients are encouraged to

consult with outside professional advisors, including for tax, accounting or legal advice.

LFS’ financial planning services include a recommended financial plan that is based on a client’s stated investment

objective, risk tolerance, age, current asset allocation and value of assets. The recommended financial plan is also based on

historical financial data and assumptions about future financial trends (including market appreciation or decline, rates

of return and risks for various asset classes). Historical data may not be an indicative of future performance and

assumptions about future events may not prove to be true or relevant. LFS has no obligation to revise a client’s financial

plan or otherwise advise the client if any of LFS’ assumptions change in the future. Further, there can be no assurance

that a financial plan recommended by an IAR will be successful in achieving the client’s investment goals and objectives.

LFS’ financial plans do not provide ongoing advice. Therefore, it is important for clients to monitor current events, such

as changes in tax laws or in the financial markets, which may affect your financial plans and circumstances. Clients should

reconsider their financial planning strategy and decisions from time to time to determine the impact that these events

or changes may have on their circumstances.

Your financial plan is based on the information you provide to LFS and your IAR. Your IAR and LFS will only be

responsible for updating and correcting the information you provided for the financial plan (e.g., to reflect changes in your

life, financial situations, goals, and market or economic conditions) if you engage them to provide a new financial plan.

As a result, your financial plan may become outdated or inaccurate as these factors change over time. LFS is not

responsible for the accuracy of the assumptions and calculations made in financial planning software by third parties.

Enhancements and changes to financial planning software may be made in the future.

It is the client’s responsibility to determine if, and how, the suggestions contained in LFS’ recommended financial plan

should be implemented or otherwise followed. Clients should carefully consider all relevant factors in making these

decisions, and clients are encouraged to consult with outside professional advisors, including for tax, accounting or legal

advice. In the financial planning process, the IAR does not make recommendations regarding the purchase of specific

insurance or investment products. If you decide to implement the proposed recommendations through a brokerage or

investment advisory account, you should understand that all investments involve risk, that investment performance can

never be predicted or guaranteed and that the value of your account will fluctuate due to market conditions and other

factors. You are assuming the risks involved with investing in securities, and you could lose all or a portion of the

amount held in your account.

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Investments made and the actions taken for any such brokerage or advisory account will be subject to various market,

liquidity, currency, economic and political risks, and will not necessarily be profitable. Past performance is not a guarantee

of future results.

Additional Risk Factors

In addition to the risks listed above, there may be material risks associated with the types of products in which your account

invests, including mutual funds and ETFs. Clients should refer to the prospectus or other applicable offering documents

of those particular products for a discussion of applicable risk factors for that particular investment.

Item 9: Disciplinary Information

LFS is a registered broker-dealer and investment adviser. This section contains information about certain disciplinary

matters that LFS believes are material to a client’s evaluation of its advisory business or the integrity of its management.

LFS has also been subject to disciplinary events relating to its brokerage business which LFS does not view as material

to a client’s evaluation of its advisory business or the integrity of its management. Additional disciplinary information

regarding LFS’ brokerage business can be found in Part 1 of LFS’ Form ADV.

• On November 14, 2016, The Financial Industry Regulatory Authority, Inc. (“FINRA”) accepted LFS’ Letter of

Acceptance, Waiver and Consent whereby FINRA found that LFS failed to establish, maintain and enforce a

supervisory system, including written supervisory procedures (“WSPs”), reasonably designed to (1) ensure the

security of confidential customer information stored on electronic systems at LFS branch offices; and (2) ensure

the preservation, retention and review of consolidated reports produced by registered representatives and provided

to LFS customers, and failed to retain certain consolidated reports. LFS consented to a censure and monetary fine

of $650,000 and, with respect to Item 1, by June 14, 2017, an officer of LFS was required to certify in writing to

FINRA that LFS had (a) completed a review of its WSPs and systems; and (b) implemented necessary revisions

to such procedures and systems that are reasonably designed to achieve compliance with Rule 30 of Regulation

S-P. To date, LFS is not aware of any misuse of customer information stemming from the unauthorized access of

the cloud server. LFS has taken several corrective actions and implemented several enhancements relating to

consolidated account statements, including instituting a policy and reporting system to ensure all consolidated

customer account statements are retained and reviewed, and adopting a WSP for manually entered assets.

• On December 10, 2012, FINRA notified LFS of its acceptance of a Letter of Acceptance, Waiver and Consent (the

“December 2012 AWC”) signed and submitted to FINRA on November 13, 2012. The December 2012 AWC noted

that between March 2007 and December 2009, LFS failed to establish and maintain adequate supervisory systems

and written procedures, or failed to reasonably enforce its written procedures in the following areas:

(a) By failing to enforce its own procedures that required completion and review of a variable annuity redemption

form, LFS failed to adequately supervise the recommendations by LFS representatives to its customers to

redeem variable annuities in order to purchase non-securities products.

(b) LFS failed to enforce its policies and procedures that prohibited its registered representatives from receiving

commissions for any securities transactions occurring in customer accounts where the registered representative

was not licensed in both the state of solicitation and the state in which the customer resided at the time of the

transaction. This resulted in approximately 2,500 mostly recurring, previously scheduled transactions in

established accounts, in which LFS representatives were not properly licensed in the state the customer resided

at the time of the commission payment.

(c) LFS failed to enforce its supervisory procedures to ensure that all securities related emails sent or received

by its registered representatives were captured and retained.

In addition, from March 2007 through at least June 2009, LFS failed to ensure adequate anti-money laundering

transactional review was being performed by product sponsors in order to monitor for suspicious transactions for

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subsequent investments in accounts held directly with a product sponsor and failed to specify in its internal

procedures the timing of required employee anti-money laundering training and which employees require

training. Finally, from March 2007 to May 2008, LFS permitted its managers to conduct reviews of their own

securities transactions effected on behalf of customers and did not ensure a sufficient sample of the managers’

customer files were reviewed during branch audits. Additionally, LFS failed to complete an adequate report to

senior management in 2008, detailing known deficiencies of the firm’s system of supervisory controls. As a result

of the foregoing, LFS violated NASD Rules 2110, 3010, 3011, 3012 and 3110 and FINRA Rule 2010. LFS was

censured and fined $525,000. LFS agreed to these sanctions without admitting or denying the findings.

• On November 20, 2012, FINRA notified LFS of its acceptance of a Letter of Acceptance, Waiver and Consent (the

“November 2012 AWC”) signed and submitted to FINRA on November 6, 2012. The November 2012 AWC noted

that from about January 2008 through about May 2010, LFS failed to establish and maintain a supervisory system

and establish, maintain and enforce written supervisory procedures reasonably designed to supervise the activities

of its registered representatives. LFS failed to respond to certain “red flags” regarding a registered representative

and thus did not detect the existence of a scheme perpetrated through his outside business in which he defrauded

investors. This conduct violated NASD Conduct Rules 3010 and 2110 and FINRA Rule 2010. LFS was censured

and fined $175,000. LFS agreed to these sanctions without admitting or denying the findings.

• On February 16, 2011, FINRA notified LFS of its acceptance of a Letter of Acceptance, Waiver and Consent

(the “2011 AWC”) signed and submitted to FINRA on December 21, 2010. The 2011 AWC noted that between

2002 and 2009 LFS failed to adequately protect customer records and information in the firm’s client portfolio

management system and allowed certain employees to access its web-based customer account system by using

shared log-on credentials without establishing adequate procedures and without controlling or monitoring who

had access to the common log-on credentials. In addition, LFS failed to require security software and anti-virus

protection and to audit computers owned by its registered representatives and used in connection with LFS’

securities business. As a result of the foregoing, LFS violated Rule 30 of Regulation S-P, NASD Rules 3010 and

2110 and FINRA Rule 2010. LFS was censured and fined $450,000, and the fine was paid in full on February

23, 2011.

Item 10: Other Financial Industry Activities and Affiliations

LFS is a registered broker-dealer and its IARs are also generally registered representatives of LFS.

In addition to LFS’ registration as an investment adviser, LFS is also registered as a broker-dealer and sells

investment products and services, including stocks, bonds, mutual funds, annuities, insurance products and

options. Some of LFS’ executive officers are also officers of LNL and Lincoln Life & Annuity Company of

New York. The proportion of time spent on each of these activities cannot be readily determined.

LFS is affiliated with the following companies due to common ownership by LNC:

• The Lincoln National Life Insurance Company (insurance company);

• Lincoln Life & Annuity Company of New York (insurance company);

• LFA, Limited Liability Company (insurance agency);

• Lincoln Financial Distributors, Inc. (broker-dealer);

• Lincoln Financial Advisors Corporation (broker-dealer, investment adviser, and insurance agency);

• Lincoln Investment Advisors Corporation (investment adviser);

• First Penn-Pacific Life Insurance Company (insurance company);

• JPSC Insurance Services, Inc. (insurance agency);

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• California Fringe Benefit and Insurance Marketing Corporation (insurance agency);

• LFD Insurance Agency, Limited Liability Company (insurance agency);

• Lincoln Financial Group Trust Company, Inc. (trust company);

• Lincoln Investment Management Company (investment adviser);

• Westfield Assigned Benefits Company (insurance agency); and

• Lincoln Life Assurance Company of Boston (insurance company).

Conflicts of interest are created by financial incentives and/or compensation arrangements between LFS and its affiliates.

These conflicts of interest and the steps taken by LFS to address them are described above in the section on “Fees and

Compensation.”

LFS may recommend or select other investment advisers for clients and receive compensation directly or indirectly

from those advisers. This creates a conflict of interest in that LFS and the IARs have a financial incentive to recommend

advisers based on compensation paid. These conflicts of interest and the steps taken by LFS to address them are described

above in the section on “Fees and Compensation.”

LFS and your IAR may earn more compensation if you invest in a program described in this Brochure than if you open a

brokerage account to buy individual securities or mutual funds. However, in a brokerage account, you would not receive

all the benefits of the programs described in this Brochure, such as ongoing investment advice and portfolio management.

Therefore, IARs and LFS have a conflict of interest given their financial incentive to recommend one of the programs

described in this Brochure. The decision to invest in an advisory program is solely that of the client. Clients are provided

a full description of the services and relevant fees provided under each advisory program. We also require that there be a

review of your account at account-opening and periodically to determine whether it is suitable and in your best interest in

light of your investment objectives, financial circumstances, and other characteristics.

Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading

LFS has adopted an Investment Adviser Code of Ethics (the “Code”), and all IARs and “access persons” (as defined under

the Advisers Act) are required to understand and follow its provisions. Through the Code, LFS strives to ensure high

standards of professional excellence and ethical conduct among its associates. The Code is aligned with Lincoln Financial

Group’s long-standing shared values of: Integrity, Commitment of Excellence, Responsibility, Respect, Fairness, Diversity

and Employee Ownership. LFS will provide a copy of the Code to any client or prospective client on request. If you

would like a copy of the Code, please call (800) 258-3648 or send an email request to [email protected].

LFS may engage in principal transactions mainly involving debt securities. When doing so, these securities are

recommended to LFS’ clients on a fully disclosed basis and are conducted on a “riskless transaction” basis. Under these

circumstances, LFS may buy or sell securities it recommends to its clients as a principal. All of this information is

fully disclosed to clients through trade confirmations.

LFS, IARs and other associated persons may buy or sell securities identical to those recommended to clients for their

personal accounts. In addition, any related person may have an interest or position in certain securities which may also

be recommended to clients. This creates a conflict of interest in that IARs have an incentive to put their own interests

ahead of clients. Personal securities transactions by IARs are recorded and monitored by LFS.

IARs may provide financial plans to clients containing recommendations regarding investment services or products that

are offered by LFS or its affiliates. IARs will not recommend that clients implement their financial plans through LFS;

however, IARs may make clients aware that LFS or its affiliates offer products or services contained in a recommended

financial plan. The decision of whether to implement a recommended financial plan and through which financial firms

to implement, is solely that of the client. IARs will not base recommendations made in a client’s financial plan on the

products or services offered through LFS or its affiliates, but instead will base its recommendations on the investment

objectives and financial condition of the particular client. Nonetheless, IARs may have an indirect financial incentive to

recommend products or services that are offered by LFS or its affiliates.

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Item 12: Brokerage Practices

The brokerage practices for the advisory services discussed in this Brochure vary depending on the particular program or

service. Because LFS and the IARs generally do not have the discretion or authority to select broker-dealers or execute

transactions for the advisory services and programs discussed in this Brochure, LFS does not have the opportunity to

aggregate orders for the purchase or sale of securities for various client accounts.

Although LFS and the IARs may recommend or assist clients in selecting particular advisory programs, neither LFS nor

the I A R s have the discretion or authority to select broker-dealers for the third-party investment advisory programs

discussed in this Brochure. The brokerage practices that are applicable to a particular third-party advisory program will

be established by the sponsor of that program. In general, the third-party managers will have the discretion to select brokers

through which to execute transactions in client accounts. In many cases, such third-party managers will require that

client accounts trade through a particular broker-dealer, and those broker-dealers will frequently be affiliated with the

sponsor of the program. In other cases, these third-party managers may permit clients to direct that the manager place all

client transactions through a particular broker-dealer of the client’s choosing.

By directing brokerage to a particular broker, clients may be unable to achieve the most favorable execution of transactions

because the third-party investment manager will not be responsible for negotiating commission rates or selecting broker-

dealers. In addition, transactions for the client’s advisory account may not be “bunched” or aggregated with orders for

other accounts managed by the thirdiparty investment manager. As a result, directed brokerage may result in higher

commissions or less favorable net prices that will cost the client more money. In addition, if the cost of brokerage

commissions is included in the applicable program fee, clients that direct trades to another broker-dealer may incur a

separate brokerage charge that is in addition to the program fee. For more information about the brokerage practices of a

particular third-party manager or program, clients should refer to the Form ADV, Part 2A for the particular adviser.

Brokerage arrangements for the solicitor and referral programs discussed above will also vary by program or service.

Please refer to the Form ADV, Part 2A for each referred adviser for details.

Step-Out Trading

As discussed in Item 5: Fees and Compensation, third-party investment managers that have the discretion to execute “step-

out” trades with a non-associated broker-dealer will incur additional commissions or fees that the client will pay as a result

of a step-out trade. Any additional trading costs may negatively impact investment performance. However, the decision to

execute step-out trades may allow the manager to achieve better price execution. Some managers do not pass the additional

fee on to the client.

Some investment advisory fees for third-party investment advisory programs described in this Brochure are charged as an

“all-inclusive” bundled fee based on the assets under management. Any all-inclusive bundled or wrap fee amounts charged

by the third-party manager or sponsor will cover brokerage execution at no additional charge for trades executed with that

third-party manager’s clearing firm. The “all-inclusive” bundled wrap fees do not cover charges resulting from “step-out”

trades effected with a non-associated broker-dealer for that third-party manager. The third-party managers and sponsors

described in this Brochure are generally free to consider their own clearing firm’s trading capability versus other brokers’

trading capabilities as part of their own best-execution responsibilities and obligations as an investment adviser and sponsor

to these investment advisory programs. A “step-out” trade occurs in some instances when an investment manager purchases equity or fixed-income securities

from a different broker-dealer or the broker or dealer selling the securities to obtain a more favorable price or because the

particular security is not available through the associated broker-dealer.

In other instances, a “step-out” trade occurs when the investment manager executes a single trade for multiple clients by

aggregating orders into a single “block.” A “block” trade can provide the client with a better overall price and/or return

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because a single order could result in better execution versus placing multiple separate orders. When an investment

manager executes a “block” order, that manager is seeking to obtain the best-execution and best price. Aggregating

transactions into a single trade may afford the investment manager more control over the execution of the trade, including

avoiding an adverse effect on the price of the security that could result from effecting a series of separate, successive

and/or competing small trades with multiple broker-dealers or clearing firms.

When step-out trading occurs through broker-dealers whose commissions or other fees are not assumed within the program

fee, the client incurs additional commissions or fees in addition to any program fees. Any additional trading costs may

negatively impact investment performance. However, the decision to execute a step-out trade may allow the manager to

achieve better price execution.

Further information regarding third-party advisers utilizing step-out trades and a general description of the

additional costs related to step-out trades can be found on our website at https://www.lfg.com/public/individual/adv.

Clients should also review a list of the third-party managers at LFS that engage in step-out trading on the Client Disclosure

Page for LFS at https://www.lfg.com/public/individual/adv.

LFS anticipates that most trades will be placed through the relevant third-party investment manager’s own clearing firm

for execution because of their execution capabilities and because the all-inclusive bundled wrap fee charged by the third-

party investment manager in certain programs covers trade charges only when trades are executed through their own

clearing firm.

In placing orders for the purchase and sale of securities and directing brokerage to affect these transactions, the third-party

investment adviser’s primary objective is to obtain prompt execution of orders at the most favorable prices reasonably

obtainable. In doing so, the third-party investment adviser considers a number of factors, including, without limitation,

the overall direct net economic result to the client, the financial strength, reputation and stability of the broker, the

efficiency with which the transaction is effected, the ability to effect the transaction at all, the availability of the broker to

stand ready to execute possibly difficult transactions in the future and other matters involved in the receipt of brokerage

services.

As noted in Item 4, investment managers have the discretion to utilize a step-out trade in circumstances including, but not

limited to, those involving: equity securities, fixed income securities, certain, thinly traded securities, illiquid securities

and ETFs. Trades can be “stepped-out” to gain best execution and minimize the market impact of trades at a broker/dealer

that is not the investment manager’s associated broker-dealer. Investment managers may decide to “step-out” for a variety

of reasons, such as obtaining an optimal combination of price and service to the client along with satisfying the investment

manager’s best execution obligation.

Best Execution

In placing orders for the purchase and sale of securities and directing brokerage to effect these transactions, an investment

manager’s primary objective is to obtain best qualitative execution for clients in each client transaction so that the client’s

cost per transaction is the optimal combination of price and service considering all relevant factors including but not

limited to the type of security, timeliness of execution, efficiency of execution, and any other relevant consideration. As

such, an investment manager may choose to execute “step out” trades as discussed above and as noted above in Item 5:

Fees and Compensation.

Further information regarding the third-party investment advisers utilizing step-out trades and a general

description of the additional costs related to step-out trades can be found on our website at

www.lfg.com/public/individual/adv.

As described above, LFS’ financial planning service is completed upon the delivery of a recommended financial plan to

a client. Clients are neither required to implement any of the recommendations made in a financial plan, nor required to

transact business through LFS in implementing any portion of the recommended financial plan. IARs may make clients

40

aware that brokerage services are offered by LFS or its affiliates, through which a client can implement its recommended

financial plan. However, the decision as to whether to implement a financial plan and which financial firm to use for

implementation, is solely that of the client. If a client chooses to implement any or all of the recommendations

made in a financial plan through LFS, LFS will be acting solely as a broker-dealer, not as an investment adviser in

implementing such plan (unless otherwise agreed in writing).

LFS and the IARs have no discretion or authority with respect to the selection of broker-dealers for the Retirement Plan

Consulting Program.

For additional information on conflicts of interest created by the recommendation of a particular advisory program and the

resulting broker-dealer or custodian, including compensation arrangements between LFS and the other broker-dealer or

custodian, please see the section on “Fees and Compensation” above.

Item 13: Review of Accounts

Accounts in asset management programs are reviewed periodically as agreed upon by the IAR and client, as transactions

occur, or as requested by the client. IARs usually receive quarterly reports of client accounts. These reports are reviewed

periodically by LFS and/or the IAR and are reviewed with the client during annual reviews or as part of other meetings or

discussions between the IAR and the client. Clients in asset management programs receive confirmations from the

broker/dealer holding the accounts as activity occurs and/or monthly statements of account activity. The custodians for

asset management programs provide written reports directly to clients at least quarterly.

Financial Planning clients do not receive periodic or ongoing reports, but instead receive a completed financial plan at the

completion of the financial planning process.

When acting in a solicitor capacity, neither LFS nor the IARs are responsible for evaluating, monitoring or overseeing a

third-party adviser’s management of a client account once a referral has been made. In addition, LFS does not provide

ongoing monitoring of clients participating in its Retirement Plan Consulting Program.

Item 14: Client Referrals and Other Compensation

For a description of the economic benefits received by LFS and the IARs from entities who are not clients, as well as

conflicts of interest created by those benefits and how they are addressed, please see the section on “Fees and

Compensation” above.

Solicitor Relationships

Clients are obtained primarily through the efforts of IARs. At times, a third-party solicitor may refer a client to LFS.

Pursuant to Rule 206(4)-3 under the Advisers Act, LFS may pay a referral fee to unaffiliated third parties as compensation

for such referral. Rule 206(4)-3 under the Advisers Act requires that LFS document this arrangement pursuant to a written

agreement between the parties. In addition, the solicitor is required to deliver to each solicited client a copy of LFS’ Form

ADV, Part 2A, as well as a separate disclosure letter that describes the relationship between LFS and the solicitor, and the

compensation that the solicitor is being paid to refer the client to LFS. The fee that is paid to the solicitor is generally

a stated percentage of the advisory fee that the client pays to LFS. The amount of the solicitor fee varies based on different

factors, such as the types of services performed by the solicitor. Any advisory fees paid by a client are agreed to by the

client and the investment adviser and fully disclosed in the related account opening paperwork, client agreement and

related disclosures regardless of any solicitation fees that may be paid to a third-party solicitor by LFS.

Other Compensation

If a client needs certain types of products or services that are not offered by LFS, LFS may refer the client to various third-

41

party entities that provide these products or services. LFS may be paid referral fees by these third parties depending on

the arrangement between LFS and the third party. Examples of these types of products and services include business

valuation, foundation formation, tax strategies, and other services.

Item 15: Custody

LFS generally does not provide custodial services for client assets and all client accounts are required to be held with a

qualified custodian. Clients will receive account statements from the broker-dealer or other qualified custodian that holds

their accounts, and clients should carefully review these statements. It is important to compare the information on these

statements with reports you receive from LFS and your IAR. Please note that there may be minor variations in these

reports due to calculation methods. If you have any questions, please contact your IAR.

LFS and the IARs generally do not take possession of client funds or securities. However, in certain asset management

programs, clients have authorized LFS to deduct advisory fees from their accounts. While LFS and the IARs do not accept

authority to take possession of client assets, this level of account access is considered “custody” under Advisers Act rules.

Additionally, LFS allows clients to grant authority to their IARs to initiate transfers of funds and securities on the client’s

behalf, including transfers to third parties, through standing written authorizations. The SEC has determined that this

capability is considered “custody” under the Advisers Act rules.

Item 16: Investment Discretion

LFS generally provides investment management services on a non-discretionary basis, meaning that LFS obtains client

authorization before entering any buy or sell orders in client accounts. As mentioned previously, specific to the various

TAMP programs described in this Brochure, the TAMP sponsors and/or investment managers themselves will generally

have discretionary trading and investment authority over client accounts. The client will usually appoint the TAMP program

sponsor and/or the investment manager selected as attorney-in-fact and delegate discretionary trading authority to that

party. That allows the TAMP program sponsor and/or selected manager to buy and sell securities in the client’s account

without prior approval from the client for each transaction. In some other investment management programs offered by

LFS, including the Custom Wealth Advantage Choice Wealth Management Program, certain IARs are authorized by LFS

to have discretion on client accounts in the form of a limited trading authorization, where written trading authorization is

provided by the client. Additionally, client may grant LFS discretionary trading authority for certain program options in

the CWA Strategist Program.

LFS does not accept discretionary authority in connection with its retirement consulting or financial planning services.

Item 17: Voting Client Securities

LFS does not accept authority to vote client securities or proxies. Clients will receive their proxies or other solicitations

directly from their custodian, unless the client has provided proxy voting authority to a third party such as an investment

manager. Clients should address any questions regarding a particular solicitation to their IAR.

Item 18: Financial Information

LFS’ balance sheet for its most recent fiscal year is included with this Brochure. LFS does not have any financial

condition that is reasonably likely to impair its ability to meet its contractual commitments to clients.

December 31,

2019

Assets

Cash and invested cash 19,215,461$

Commissions and fees receivable from third parties 5,736,141

Commissions and fees receivable from affiliates 350,458

Due from affiliates 11

Deferred tax asset 319,154

Other assets 10,231,028

Net property and equipment (accumulated depreciation:

2019 - $2,206,251) 881,366

Total assets 36,733,619$

Liabilities and stockholder’s equity

Liabilities:

Payable to vendors 270,616$

Due to affiliates 3,329,139

Accrued commissions 3,733,072

Accrued compensation and benefits 453,051

Other liabilities 7,144,769

Total liabilities 14,930,647

Stockholder’s equity:

Common stock – $1 par value; 100,000 shares

authorized; 50,000 shares issued and outstanding 50,000

Additional paid-in capital 33,730,325

(11,977,353)

21,802,972

36,733,619$

Accumulated deficit

Total stockholder’s equity

Total liabilities and stockholder’s equity

Lincoln Financial Securities Corporation

Statement of Financial Condition

Lincoln Financial Advisors Corporation and Lincoln Financial Securities Corporation (both a part of Lincoln Financial Network or LFN) are committed to protecting your privacy. To provide the products and services you expect from a financial services leader, we must collect personal information about you. We do not sell your personal information to third parties. We share your personal information with third parties as necessary to provide you with the products or services you request and to administer your business with us. This Notice describes our current privacy practices. While your relationship with us continues, we will update and send our Privacy Practices Notice as required by law. Even after that relationship ends, we will continue to protect your personal information. This Notice explains our information sharing arrangement and provides information on how to contact us if you have questions regarding our privacy practices.

Information We May Collect And UseWe collect personal information about you to help us identify you as our customer or our former customer; to process your requests and transactions; provide customer service; to offer and provide investments, financial planning and insurance products and services to you; to pay your claim; to analyze in order to enhance our products and services; or to tell you about our products or services we believe you may want and use. The type of personal information we collect depends on the products or services you request and may include the following:

• Information from you: When you submit your application or other forms, you give us information such as you name; address; Social Security number; and your financial; health; and employment history; and if applicable, financial and other information about your business.

• Information about your transactions: We keep information about your transactions with us, such as the products you buy from us and the services you engage us to provide; the amount you paid for those products and services; your account balances; and your payment history.

• Information from outside our family of companies: If you are purchasing insurance products, we may collect information from consumer reporting agencies such as your credit history; credit scores; and driving and employment records. With your authorization, we may also collect information, such as medical information from other individuals or businesses.

• Information from your employer: If your employer purchases group products from us, we may obtain information about you from your employer in order to enroll you in the plan.

How We Use Your Personal InformationWe may share your personal information within our companies and with certain service providers as allowed by law. They use this information to process transactions you have requested; provide customer service; assist us in offering and providing investments, financial planning, and insurance products and services; to analyze in order to enhance our products and services; and inform you of products or services we offer that you may find useful. Our service providers may or may not be affiliated with us. They include financial service providers (for example, third party administrators; broker-dealers; insurance agents and brokers, registered representatives; reinsurers and other financial services companies with whom we have joint marketing agreements). Our service providers also include non-financial companies and individuals (for example, consultants; vendors; and companies that perform marketing services on our behalf). Information we obtain from a report prepared by a service provider may be kept by the service provider and shared with other persons; however, we require our service providers to protect your personal information and to use or disclose it only for the work they are performing for us, or as permitted by law.When you apply for one of our products, we may share information about your application with credit bureaus. We also may provide information to group policy owners, regulatory authorities and law enforcement officials and to others when we believe in good faith that the law requires disclosure. In the event of a sale of all or part of our businesses, we may share customer information as part of the sale. We do not sell or share your information with outside marketers who may want to offer you their own products and services; nor do we share information we receive about you from a consumer reporting agency. You do not need to take any action for this benefit.

Security of InformationWe have an important responsibility to keep your information safe. We use safeguards to protect your information from unauthorized disclosure. Our employees are authorized to access your information only when they need it to provide you with products, services, or to maintain your accounts. Employees who have access to your personal information are required to keep it confidential. Employees are required to complete privacy training annually.

Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates.

Lincoln Financial Advisors Corporation® Privacy Practices Notice Lincoln Financial Securities Corporation® Privacy Practices Notice

Page 1 of 2GB07367 12/19

Your Rights Regarding Your Personal Information Access: We want to make sure we have accurate information about you. Upon written request we will tell you, within 30 business days, what personal information we have about you. You may see a copy of your personal information in person or receive a copy by mail, whichever you prefer. We will share with you who provided the information. In some cases we may provide your medical information to your personal physician. We will not provide you with information we have collected in connection with, or in anticipation of, a claim or legal proceeding. If you request a copy of the information, we may charge you a fee for copying and mailing costs. In very limited circumstances, your request may be denied. You may then request that the denial be reviewed. Accuracy of Information: If you feel the personal information we have about you is inaccurate or incomplete, you may ask us to amend the information. Your request must be in writing and must include the reason you are requesting the change. We will respond within 30 business days. If we make changes to your records as a result of your request, we will notify you in writing and we will send the updated information, at your request, to any person who may have received the information within the prior two years. We will also send the updated information to any insurance support organization that gave us the information, and any service provider that received the information within the prior 7 years. If your requested change is denied, we will provide you with reasons for the denial. You may write to request the denial be reviewed. A copy of your request will be kept on file with your personal information so anyone reviewing your information in the future will be aware of your request. Accounting of Disclosures: If applicable, you may request an accounting of disclosures made of your medical information, except for disclosures:

• For purposes of payment activities or company operations; • To the individual who is the subject of the personal information or to that individual’s personal representative; • To persons involved in your health care; • For notification for disaster relief purposes; • For national security or intelligence purposes; • To law enforcement officials or correctional institutions; or • For which an authorization is required.

You may request an accounting of disclosures for a time period of less than two years from the date of your request. You may ask in writing for the specific reasons for an adverse underwriting decision. An adverse underwriting decision is where we decline your application for insurance, offer to insure you at a higher than standard rate, or terminate your coverage. Your state may provide for additional privacy protections under applicable laws. We will protect your information in accordance with these additional protections.

When Registered Representatives Leave Lincoln Financial NetworkWe understand that the relationship you have with your registered representative is important to you. If your registered representative’s affiliation with LFN ends and they choose to move to a different broker-dealer, or if your registered representative’s relationship with LFN is terminated, your LFN registered representative may be allowed to take with them copies of all client and account documentation (including but not limited to: account applications; customer statements; and other pertinent forms related to your account), so your registered representative is able to continue the relationship with you and service your account through their new firm. LFN will also retain copies of your client and account documentation. You do not need to take action if you choose to allow your LFN registered representative to keep copies of your confidential information should they leave LFN.If you do not want your registered representative to keep copies of your confidential information should they decide to end the relationship with LFN in the future, you have the right to opt out*. If your account with us is a joint account, we will treat the opt out request by a joint account owner as applying to all owners on the account. If you choose to opt out now; or at any time in the future; or wish to withdraw your opt out request, contact us by phone at 800-248-2285. If you choose to opt out there will be a 30-day period before your opt out will take effect.

If you have questions about your personal information, please provide your full name, address and telephone number and either email your question to our Data Subject Access Request Team at [email protected] or mail to:

Lincoln Financial GroupATTN: Corporate Privacy Office, 7C-011300 S. Clinton StFort Wayne, IN 46802

*Lincoln adheres to all applicable state and federal privacy regulations. Residents of Arizona, California, Georgia, Maine, Massachusetts, Minnesota, Montana, Nevada, New Jersey, North Carolina, Ohio, Oregon, Vermont, and Virginia will be provided an opportunity to opt in for information sharing per applicable state law. If you reside in one of these states, written authorization must be provided to your registered representative.**This information applies to the following Lincoln Financial Network companies: Lincoln Financial Advisors CorporationLincoln Financial Securities Corporation JPSC Insurance Services, Inc.LFA, Limited Liability Company

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